I need clarification with respect to PF deduction. If an employee's basic salary is more than INR 15,000, and the contribution is restricted to the ceiling limit of INR 15,000, what should be done in the following scenarios:
1. If the employee is on leave and earned less than INR 15,000 in a month, should the deduction be based on the actual earned Basic and DA or on a prorated basis to INR 15,000?
2. If the employee worked 5 days in a month and earned INR 7,000 as Basic and DA, should the deduction be on the actual earned amount of INR 7,000 or a prorated amount of (INR 15,000 / 30 * 7) = INR 3,500?
Please provide clarification along with a notification copy regarding this matter. Your prompt response is appreciated.
Thank you.
From India, Bengaluru
Acknowledge(0)
Amend(0)
1. If the employee is on leave and earned less than INR 15,000 in a month, should the deduction be based on the actual earned Basic and DA or on a prorated basis to INR 15,000?
2. If the employee worked 5 days in a month and earned INR 7,000 as Basic and DA, should the deduction be on the actual earned amount of INR 7,000 or a prorated amount of (INR 15,000 / 30 * 7) = INR 3,500?
Please provide clarification along with a notification copy regarding this matter. Your prompt response is appreciated.
Thank you.
From India, Bengaluru
Acknowledge(0)Amend(0)
Hi Nirmala,
If an employee is earning above 15000/- and you are restricting to the ceiling limit, and in any month, if an employee received wages less than 15000/- (For example 14000/-), then PF is calculated on the actual earned wages only (12% on 14000/-).
If an employee earned only 7000/- as Basic+DA, then PF is contributed on 7000/-.
From India, Bangalore
Acknowledge(0)Amend(0)
653If an employee is earning above 15000/- and you are restricting to the ceiling limit, and in any month, if an employee received wages less than 15000/- (For example 14000/-), then PF is calculated on the actual earned wages only (12% on 14000/-).
If an employee earned only 7000/- as Basic+DA, then PF is contributed on 7000/-.
From India, Bangalore
Acknowledge(0)Amend(0)
Nirmala,
No need to deduct the PF if Basic is less than 15000 due to absence or W.P. YOU HAVE TO KEEP HIS FORM 11 in your records. If one or two months' basic is less than 15000, then it is acceptable by EPFO but not more than that. Also, for further information, you can consult your respective RPFO.
Thanks, Shubham
From India, Faridabad
Acknowledge(0)Amend(0)
No need to deduct the PF if Basic is less than 15000 due to absence or W.P. YOU HAVE TO KEEP HIS FORM 11 in your records. If one or two months' basic is less than 15000, then it is acceptable by EPFO but not more than that. Also, for further information, you can consult your respective RPFO.
Thanks, Shubham
From India, Faridabad
Acknowledge(0)Amend(0)
Once an employee is a member of EPF, there is no point in seeking exemption, even if he/she is employed by a different organization.
Moreover, the question pertains to existing covered employees who are earning above Rs. 15,000/-.
From India, Bangalore
Acknowledge(0)Amend(0)
Moreover, the question pertains to existing covered employees who are earning above Rs. 15,000/-.
From India, Bangalore
Acknowledge(0)Amend(0)
It is settled law that clarifies if an employee's full month's rated salary/wages exceed the coverable limit, meaning they are considered an excluded/exempted employee, and if their attendance and earnings are less than Rs. 15,000, then PF is not applicable, and no contribution is required even if they are paid daily wages. Such employees will always be outside the purview of PF coverage.
Regards,
RDS Yadav
Director, Navtarang HR Services
From India, Delhi
Acknowledge(0)Amend(0)
Regards,
RDS Yadav
Director, Navtarang HR Services
From India, Delhi
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
HIKE OF EPF CEILING LIMIT.jpg
EPF Wages Ceiling enhancement_Not ification_28 08 2014.pdf