If basic exceeds 6500, suppose basic is 10,000, can we put 8.33% of 10,000 (i.e., Rs. 833) towards the pension fund? Regarding 10,000 basic, the employer is paying Rs. 1200/- as his 12% contribution. Though 6500 is the limit of the basic salary for the pension scheme, can we contribute more as our basic increases? My question is related specifically to the pension scheme, so please reply only on that. This is important.
Rakesh
From India, Pune
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2Rakesh
From India, Pune
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Dear Mr. Rakesh,
Even though the basic exceeds above 6500/-, you only have to pay Rs. 541/- to the pension fund. For example, let's say the basic is Rs. 10000/-. PF-Employee Contribution is Rs. 1200/-. Employer Contribution amounts to Rs. 659/- going to PF and Rs. 541/- going to EPS.
Regards,
MKS
From India, Madras
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Even though the basic exceeds above 6500/-, you only have to pay Rs. 541/- to the pension fund. For example, let's say the basic is Rs. 10000/-. PF-Employee Contribution is Rs. 1200/-. Employer Contribution amounts to Rs. 659/- going to PF and Rs. 541/- going to EPS.
Regards,
MKS
From India, Madras
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Dear Mr. Rakesh,
An employer's contribution towards EPS is restricted to Rs. 541/-, i.e., 8.33% of Rs. 6500/- only. The rest of the amount is to be deposited in the EPF account. So, even if a person gets more than Rs. 6500/-, his contribution towards EPF is limited to Rs. 541/-
Thanks,
SRP
From India, Gurgaon
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An employer's contribution towards EPS is restricted to Rs. 541/-, i.e., 8.33% of Rs. 6500/- only. The rest of the amount is to be deposited in the EPF account. So, even if a person gets more than Rs. 6500/-, his contribution towards EPF is limited to Rs. 541/-
Thanks,
SRP
From India, Gurgaon
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hi all are the pf contribution rate same for all industries at 12% or are employees in different industries charged different rates?
From India, Ahmadabad
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From India, Ahmadabad
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An employee can voluntarily opt for an amount which is greater then 12% of basic. But the employer’s contribution will be same i.e. 12%, out of which 8.33% goes to EPS and 3.67 % goes to EPF.
From India, New Delhi
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From India, New Delhi
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Dear Friend,
I accept and agree with all the suggestions you have received that employees getting a basic salary (+DA+cash value of food) exceeding Rs. 6500, the pension contribution will be a maximum of 8.33% of Rs. 6500, i.e., Rs. 541. However, twice during inspections by different PF EO, they told me that the pension contribution may be more at the employer's wish and with consent from the PF authority, as the pension contribution is wholly the employer's responsibility. However, I, like several others, have never taken the effort to clarify these matters.
Regards,
Manish
From India, Lucknow
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I accept and agree with all the suggestions you have received that employees getting a basic salary (+DA+cash value of food) exceeding Rs. 6500, the pension contribution will be a maximum of 8.33% of Rs. 6500, i.e., Rs. 541. However, twice during inspections by different PF EO, they told me that the pension contribution may be more at the employer's wish and with consent from the PF authority, as the pension contribution is wholly the employer's responsibility. However, I, like several others, have never taken the effort to clarify these matters.
Regards,
Manish
From India, Lucknow
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Dear Manish,
The information given by the EO of the PF is wrong. In any case, the contribution to the pension fund shall not exceed Rs. 540/- or 8.33% of the basic, with a maximum of Rs. 6500/-. Otherwise, the PF office will not accept the annual returns. This is a situation I have personally encountered.
Before my joining, my junior had accounted for pension at 8.33% of the actual basic, e.g., Rs. 30,000/-, which was never accepted. We had to correct the statement, and now the situation is such that in the PF accounting, there is less payment in A/c 1 and excess payment in A/c no. 10 of the pension.
Therefore, it is essential to be clear that the contribution should not exceed Rs. 541/- in the pension fund until any further revision or amendment in the pensionable salary.
Thanks & Regards,
Amal Shere
From India, Mumbai
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The information given by the EO of the PF is wrong. In any case, the contribution to the pension fund shall not exceed Rs. 540/- or 8.33% of the basic, with a maximum of Rs. 6500/-. Otherwise, the PF office will not accept the annual returns. This is a situation I have personally encountered.
Before my joining, my junior had accounted for pension at 8.33% of the actual basic, e.g., Rs. 30,000/-, which was never accepted. We had to correct the statement, and now the situation is such that in the PF accounting, there is less payment in A/c 1 and excess payment in A/c no. 10 of the pension.
Therefore, it is essential to be clear that the contribution should not exceed Rs. 541/- in the pension fund until any further revision or amendment in the pensionable salary.
Thanks & Regards,
Amal Shere
From India, Mumbai
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Dear Rajesh Singh,
If full salary has not been paid, then you should calculate the ceiling salary on a pro-rata basis. For example, if a person drawing a salary of Rs. 10,000 has attended work for 25 days out of a total of 30 days, then his pension contribution will be calculated as 6500 x 25 / 30 x 8.33%. This will amount to Rs. 451.
Abbas
From India, Bangalore
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If full salary has not been paid, then you should calculate the ceiling salary on a pro-rata basis. For example, if a person drawing a salary of Rs. 10,000 has attended work for 25 days out of a total of 30 days, then his pension contribution will be calculated as 6500 x 25 / 30 x 8.33%. This will amount to Rs. 451.
Abbas
From India, Bangalore
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If basic is less than 6500, then PF = 12% of basic. If basic is greater than or equal to 6500, then PF has to be 780 employer's contribution. Here the employee has the option to opt out of PF. The interest on PF has increased to 9.5% now.
From India, Delhi
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From India, Delhi
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Dear Ganesh Chavan & Riah,
For PF contribution, there are two classifications according to the percentage of contribution:
1. For brick, beedi, jute, guar gum factories, coir industries other than spinning sector, and all sick industries, the contribution is 10%.
2. For others, the contribution is 12%.
Also, even though there is a statutory ceiling of Rs. 6,500 on salary, there is an option (in the scheme) for the employer and employee to contribute based on the actual salary in excess of Rs. 6,500.
Abbas.P.S
From India, Bangalore
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For PF contribution, there are two classifications according to the percentage of contribution:
1. For brick, beedi, jute, guar gum factories, coir industries other than spinning sector, and all sick industries, the contribution is 10%.
2. For others, the contribution is 12%.
Also, even though there is a statutory ceiling of Rs. 6,500 on salary, there is an option (in the scheme) for the employer and employee to contribute based on the actual salary in excess of Rs. 6,500.
Abbas.P.S
From India, Bangalore
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I shall quote clause 11(3) of the EPS-95:
"The Maximum Pensionable Salary
The maximum pensionable salary shall be limited to Rs. 6500/- per month. [Provided that if, at the option of the employer and employee, contribution paid on salary exceeding Rs. 6500/- per month from the date of commencement of this Scheme or from the date salary exceeds Rs. 6500/-, whichever is later, and 8.33 percent share of the employers thereof is remitted into the Pension Fund, pensionable salary shall be based on such higher salary.]"
But till date, no such contribution to EPS for a salary in excess of Rs. 6500 p.m has been reported anywhere in India. I know a few cases where the EPFO has not entertained such an option. Whatever the provisions in the scheme, practically the contribution is based on the salary subject to the ceiling of Rs. 6500.
Regards,
Abbas.P.S
From India, Bangalore
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"The Maximum Pensionable Salary
The maximum pensionable salary shall be limited to Rs. 6500/- per month. [Provided that if, at the option of the employer and employee, contribution paid on salary exceeding Rs. 6500/- per month from the date of commencement of this Scheme or from the date salary exceeds Rs. 6500/-, whichever is later, and 8.33 percent share of the employers thereof is remitted into the Pension Fund, pensionable salary shall be based on such higher salary.]"
But till date, no such contribution to EPS for a salary in excess of Rs. 6500 p.m has been reported anywhere in India. I know a few cases where the EPFO has not entertained such an option. Whatever the provisions in the scheme, practically the contribution is based on the salary subject to the ceiling of Rs. 6500.
Regards,
Abbas.P.S
From India, Bangalore
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In the above-posted provision in EPS, it is clearly stated that the salary limit is Rs. 6,500 per month, i.e., Rs. 6,500 is for 30 or 31 days (as the case may be). So for 25 days, it is to be reduced to 6,500 x 25/30 or 25/31.
Abbas.P.S
From India, Bangalore
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Abbas.P.S
From India, Bangalore
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Pension Fund Contribution Clarification
The contribution towards the pension fund can indeed be more than 8.33% of Rs. 6,500 (Rs. 541). Suppose an employee's basic DA is Rs. 10,000. In such a case, 8.33% of the employer's contribution can be remitted to the pension account monthly if both the employer and employee agree. You can verify this with PF authorities.
In this scenario, the pension received by the employees will be higher, as the pensionable salary will be their actual salary and not Rs. 6,500.
Regards,
Sudipta Chaudhuri.
From India, Calcutta
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The contribution towards the pension fund can indeed be more than 8.33% of Rs. 6,500 (Rs. 541). Suppose an employee's basic DA is Rs. 10,000. In such a case, 8.33% of the employer's contribution can be remitted to the pension account monthly if both the employer and employee agree. You can verify this with PF authorities.
In this scenario, the pension received by the employees will be higher, as the pensionable salary will be their actual salary and not Rs. 6,500.
Regards,
Sudipta Chaudhuri.
From India, Calcutta
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The statutory contribution is 8.33% on a salary up to Rs. 6,500. For amounts above the ceiling, the contribution can be paid only with the consent of the RPFC. However, to date, there have been no reports from India regarding contributions to EPS in excess of the ceiling limit.
Abbas.P.S
From India, Bangalore
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Abbas.P.S
From India, Bangalore
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Yes, w.e.f 01.09.2015 ceiling limit of salary is enhanced from 6500 to 15000. Accordingly this will reflect in all PF related contributions viz. PF, Pension, EDLI etc. Abbas.P.S
From India, Bangalore
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From India, Bangalore
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Dear Rakesh,
Hi, when any employee exceeds the limit of basic pay of 6500/-, you have to pay pension on 6500/- only. Pension is limited up to 541, i.e., 8.33% of Rs. 6500/-.
Suppose you have an employee whose basic is 10000/-. You will deduct PF @ 12% from his basic pay, Rs. 1200.00. Company will pay PF @ 12% in the form of 8.33% of Rs. 6500/-, i.e., 541.00, and the remaining amount of (1200-541) is 659.00.
These (1200+659) = 1859 will be credited into account no. 1 of PF, and Rs. 541 will be credited to Account no. 10 of the Pension scheme. Hope you have got clear on your topic.
Regards,
Ali
From India, Hyderabad
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Hi, when any employee exceeds the limit of basic pay of 6500/-, you have to pay pension on 6500/- only. Pension is limited up to 541, i.e., 8.33% of Rs. 6500/-.
Suppose you have an employee whose basic is 10000/-. You will deduct PF @ 12% from his basic pay, Rs. 1200.00. Company will pay PF @ 12% in the form of 8.33% of Rs. 6500/-, i.e., 541.00, and the remaining amount of (1200-541) is 659.00.
These (1200+659) = 1859 will be credited into account no. 1 of PF, and Rs. 541 will be credited to Account no. 10 of the Pension scheme. Hope you have got clear on your topic.
Regards,
Ali
From India, Hyderabad
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EPS - Form No. 10-D Pension Claim Form Aadhaar.pdf