Guidance on PF Contributions for Employees
Please guide me on the following queries:
1. We plan to implement PF contributions for all employees, including those with a basic salary exceeding 6500 in our private organization. Kindly clarify if the employer's contribution is mandatory or if both contributions can be deducted from the employee's salary.
2. If possible, provide details on the deduction slab. Should it be limited to 6500 or the full basic amount?
3. Also, advise if this change can be included in the company policy.
Regards,
E. Raja
From India, Chennai
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Please guide me on the following queries:
1. We plan to implement PF contributions for all employees, including those with a basic salary exceeding 6500 in our private organization. Kindly clarify if the employer's contribution is mandatory or if both contributions can be deducted from the employee's salary.
2. If possible, provide details on the deduction slab. Should it be limited to 6500 or the full basic amount?
3. Also, advise if this change can be included in the company policy.
Regards,
E. Raja
From India, Chennai
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Mr Raja Yes.It is possible.Employer also has to contribute.Employer cannot deduct his contribution from employee’s salary. Varghese Mathew 09961266966
From India, Thiruvananthapuram
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931From India, Thiruvananthapuram
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Further to what Mr. Varghese Mathew has replied, please check the revised cap of PF
From India, Ahmadabad
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From India, Ahmadabad
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Dear Hi, Please follow the provisions of the EPF(and Miscellaneous Provisions) Act in toto. S.K.Johri
From India, Delhi
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From India, Delhi
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Please see the attached notes for relevant information.
PF Contribution Details
1) & 2) As you know, 12% of Basic + DA will have to be deducted from the employee's salary, with a maximum limit of Rs. 6500. For those who choose not to limit it to Rs. 6500 but opt for higher amounts like 10,000, 15,000, etc., you can deduct at 12%, but it is compulsory up to 6500. The employer's share is also limited to 6500. Employers are not required to contribute more when the salary exceeds 6500. For example, if the salary is 10,000, the employer only needs to contribute 12% of 6500. However, if the employer wishes, they can contribute 12% of 10,000, but it is not mandatory. In any case, the employer's contribution should not be deducted from the employee's salary. Doing so is illegal and punishable.
Policy Inclusion
3) The policy can be included in the company policy, but ensure that it complies with the minimum requirements stated in the EPF Act. The employer's policy can provide additional or better benefits.
Best Regards,
E. Raja
From India, Bangalore
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PF Contribution Details
1) & 2) As you know, 12% of Basic + DA will have to be deducted from the employee's salary, with a maximum limit of Rs. 6500. For those who choose not to limit it to Rs. 6500 but opt for higher amounts like 10,000, 15,000, etc., you can deduct at 12%, but it is compulsory up to 6500. The employer's share is also limited to 6500. Employers are not required to contribute more when the salary exceeds 6500. For example, if the salary is 10,000, the employer only needs to contribute 12% of 6500. However, if the employer wishes, they can contribute 12% of 10,000, but it is not mandatory. In any case, the employer's contribution should not be deducted from the employee's salary. Doing so is illegal and punishable.
Policy Inclusion
3) The policy can be included in the company policy, but ensure that it complies with the minimum requirements stated in the EPF Act. The employer's policy can provide additional or better benefits.
Best Regards,
E. Raja
From India, Bangalore
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PF Contribution Guidelines
As per the PF Miscellaneous Act, 12% of (Basic + DA) must be recovered from the salary of employees, treating a maximum salary (Basic + DA) as Rs. 15,000/-. For those who are willing not to limit it up to Rs. 15,000/-, they can deduct @ 12%, but there is no compulsion. However, up to Rs. 15,000/-, it is compulsory. The employer's share is also limited only up to Rs. 15,000/-. The employer does not need to contribute more when the salary is above Rs. 15,000/-. For example, if the salary is Rs. 20,000, the employer has to contribute only @ 12% on Rs. 15,000/- (New Circular dated 14/07/2014). Here also, if the employer is willing, they can contribute @ 12% on Rs. 20,000/-, but there is no compulsion.
Regards,
Balamurugan L
[Phone Number Removed For Privacy Reasons]
Pondicherry
From India, Kochi
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As per the PF Miscellaneous Act, 12% of (Basic + DA) must be recovered from the salary of employees, treating a maximum salary (Basic + DA) as Rs. 15,000/-. For those who are willing not to limit it up to Rs. 15,000/-, they can deduct @ 12%, but there is no compulsion. However, up to Rs. 15,000/-, it is compulsory. The employer's share is also limited only up to Rs. 15,000/-. The employer does not need to contribute more when the salary is above Rs. 15,000/-. For example, if the salary is Rs. 20,000, the employer has to contribute only @ 12% on Rs. 15,000/- (New Circular dated 14/07/2014). Here also, if the employer is willing, they can contribute @ 12% on Rs. 20,000/-, but there is no compulsion.
Regards,
Balamurugan L
[Phone Number Removed For Privacy Reasons]
Pondicherry
From India, Kochi
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Benefits under EPF act.docx