Hi, can anybody let me know whether PF deductions is not compulsory for those employees who’s gross salary is above 15000/-? Aarti
From India, Mumbai
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1From India, Mumbai
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What is the relevance of your question? What is the importance of Rs. 15000 salary in EPF? Abbas.P.S
From India, Bangalore
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From India, Bangalore
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Oh mam, how are you? I haven't received any mail in a long time. What's going on?
PF will be deducted on the basic salary, not on the gross amount. The basic amount should be 6500/- or less. If employees are getting more than 6500/- as basic, then it will depend on the employer whether they want to provide PF facility or not.
If you didn't understand, please ask again.
Ashish
Delhi
7838606486
From India, New Delhi
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PF will be deducted on the basic salary, not on the gross amount. The basic amount should be 6500/- or less. If employees are getting more than 6500/- as basic, then it will depend on the employer whether they want to provide PF facility or not.
If you didn't understand, please ask again.
Ashish
Delhi
7838606486
From India, New Delhi
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Hey abbas if u knw thn simpky reply fr tht thrad she dnt knw tht is y she is askng we r here to shre our knwkdge n to learn bt dnt telll to any one tht questiin is nt relavant ashish
From India, New Delhi
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From India, New Delhi
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Dear Aarti,
PF calculation is based on the basic salary and not on the gross. Under the PF Act, we have a ceiling of Rs. 6,500 on basic salary. For every employee whose salary is more than Rs. 6,500, they can opt for PF deduction by filling out Form 11. They are also liable to receive employer contribution towards PF as mentioned in their offer letter as PF allowance.
Regards, Prafull
From India, Mumbai
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PF calculation is based on the basic salary and not on the gross. Under the PF Act, we have a ceiling of Rs. 6,500 on basic salary. For every employee whose salary is more than Rs. 6,500, they can opt for PF deduction by filling out Form 11. They are also liable to receive employer contribution towards PF as mentioned in their offer letter as PF allowance.
Regards, Prafull
From India, Mumbai
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Hi Abhas,
I asked this question because in my company, we don't deduct PF of those employees whose gross is more than 15000/-. Basic is 50% of gross, i.e., 7500/-. I had a confusion, so I asked, and you should not have replied if you felt it was not relevant.
Aarti
From India, Mumbai
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I asked this question because in my company, we don't deduct PF of those employees whose gross is more than 15000/-. Basic is 50% of gross, i.e., 7500/-. I had a confusion, so I asked, and you should not have replied if you felt it was not relevant.
Aarti
From India, Mumbai
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Hi Thanks for your reply. So the employees who’s basic is more than 6500 are exempted from the PF deduction? or its voluntary on their part? Aarti
From India, Mumbai
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From India, Mumbai
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Hi Aarti,
This site is especially meant for those who come up with queries, and we all appreciate those who provide their replies and share their knowledge, which is useful for a beginner. So, don't hesitate to ask your queries if you get any obscure replies.
I hope you have cleared your doubt.
Regards,
Prafull
From India, Mumbai
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This site is especially meant for those who come up with queries, and we all appreciate those who provide their replies and share their knowledge, which is useful for a beginner. So, don't hesitate to ask your queries if you get any obscure replies.
I hope you have cleared your doubt.
Regards,
Prafull
From India, Mumbai
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Dear Aarti,
Yes, employees can voluntarily contribute towards PF equivalent to 12% of their basic salary apart from the usual deduction, which is also 12% of the basic salary. And don't get confused between basic and gross because in PF calculation, we only consider the employee's basic salary.
Regards,
Prafull
From India, Mumbai
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Yes, employees can voluntarily contribute towards PF equivalent to 12% of their basic salary apart from the usual deduction, which is also 12% of the basic salary. And don't get confused between basic and gross because in PF calculation, we only consider the employee's basic salary.
Regards,
Prafull
From India, Mumbai
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Hi prafull i am not confused between basic and gross. i had confusion regarding compulsion of PF deduction. Thank you so much for your guidance. Aarti
From India, Mumbai
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From India, Mumbai
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Hi Prafull,
I am looking for an HR position. I have one year of experience as an HR Generalist and 3 years of experience as an accounting assistant. If you find any vacancies, please let me know. I am residing in Pune.
Regards,
Aarti
From India, Mumbai
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I am looking for an HR position. I have one year of experience as an HR Generalist and 3 years of experience as an accounting assistant. If you find any vacancies, please let me know. I am residing in Pune.
Regards,
Aarti
From India, Mumbai
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Hey professionals, please help me.
I'm a new HR person in my company, which is a manufacturing company. My supervisor asked me to find out the benefits of salary structure for both employees and employers.
Thank you for your assistance.
From India, Pune
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I'm a new HR person in my company, which is a manufacturing company. My supervisor asked me to find out the benefits of salary structure for both employees and employers.
Thank you for your assistance.
From India, Pune
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Dear Aarti,
You need to be clear on the question first. There is no importance of ₹15,000 gross in EPF. PF is based on basic, not gross. The PF wage ceiling is ₹6,500 basic, which means ₹780. After that, the employer can get an exemption from the PF department. ₹15,000 is the wage ceiling of ESI.
Khan Feeroze Shams
HRD
+91-9910911621
From India, Delhi
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You need to be clear on the question first. There is no importance of ₹15,000 gross in EPF. PF is based on basic, not gross. The PF wage ceiling is ₹6,500 basic, which means ₹780. After that, the employer can get an exemption from the PF department. ₹15,000 is the wage ceiling of ESI.
Khan Feeroze Shams
HRD
+91-9910911621
From India, Delhi
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U. R right prafull hey i want to ask u could i get job in pune as i hv 7 yr. Of exp in same field nw i m in delhi n i want to relocate to mumbai or pune ashish delhi 7838606486
From India, New Delhi
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From India, New Delhi
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Hi Aarti,
In my last company where I was working, PF and ESIC used to be deducted every month, but the company was not registered under PF and ESIC, and they never opened a PF account for any employee. I know this because I was working in the HR department. Whenever any employee asked for the PF account number, my manager always instructed me to say that it was in process. However, it never materialized, and now the company has shut down.
What can we do to retrieve the amount that was deducted from our salaries? Please suggest.
Thank you.
From India, Mumbai
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In my last company where I was working, PF and ESIC used to be deducted every month, but the company was not registered under PF and ESIC, and they never opened a PF account for any employee. I know this because I was working in the HR department. Whenever any employee asked for the PF account number, my manager always instructed me to say that it was in process. However, it never materialized, and now the company has shut down.
What can we do to retrieve the amount that was deducted from our salaries? Please suggest.
Thank you.
From India, Mumbai
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Hello, my name is Gaurav, and I want to know how to handle my salary entry in the book at 12000/- per month. My employer has no problem deducting PF on the full amount. Please tell me how to deduct PF on 12000/- and how to deposit it.
From India, Mumbai
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From India, Mumbai
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Dear Aarti,
PF deduction criteria:
1) The employer's staff strength should be above 20 nos.
2) For such companies, PF deduction is compulsory.
3) PF is deducted on basic + DA.
4) Employer's liability is limited to only 12 percent of Rs. 6,500/-
5) Even if the basic + DA is above Rs. 6,500, employee PF can be deducted at the total amount. They can opt for deduction up to 20 percent of their basic + DA, even if the total amount is above Rs. 6,500.
Your assumption that employees whose basic + DA is more than Rs. 6,500 are exempted from PF deduction is not correct.
Regards,
T S A Padmanabhan
From India, Delhi
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PF deduction criteria:
1) The employer's staff strength should be above 20 nos.
2) For such companies, PF deduction is compulsory.
3) PF is deducted on basic + DA.
4) Employer's liability is limited to only 12 percent of Rs. 6,500/-
5) Even if the basic + DA is above Rs. 6,500, employee PF can be deducted at the total amount. They can opt for deduction up to 20 percent of their basic + DA, even if the total amount is above Rs. 6,500.
Your assumption that employees whose basic + DA is more than Rs. 6,500 are exempted from PF deduction is not correct.
Regards,
T S A Padmanabhan
From India, Delhi
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Dear Aarti,
The PF ceiling is Rs. 6,500, but if you deduct PF from the first day of the job on Rs. 6,500, then it can be continued. However, if you deduct PF on a salary of Rs. 15,000, then you have to continue to deduct PF on Rs. 15,000. For the pension scheme, you may split the salary of Rs. 6,500 as the pensionable salary and contribute the rest to PF.
Regards,
Brijesh
From India, Mumbai
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The PF ceiling is Rs. 6,500, but if you deduct PF from the first day of the job on Rs. 6,500, then it can be continued. However, if you deduct PF on a salary of Rs. 15,000, then you have to continue to deduct PF on Rs. 15,000. For the pension scheme, you may split the salary of Rs. 6,500 as the pensionable salary and contribute the rest to PF.
Regards,
Brijesh
From India, Mumbai
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Dear Aaeti,
In line with the topic, please note the following rules while calculating the Provident Fund contributions.
Basic + D.A / VDA / Special Allowance, if it exceeds Rs. 6500/-, it depends on the management whether to pay the higher employer's contribution. However, it is binding on the employer to pay the employer's contribution up to or within the limit.
If we consider that Mr. X is your employee and is drawing a Basic Salary of Rs. 10000/- per month.
In the case of capping the salary for calculation at Rs. 6500/-, the employee's contribution is 12%, and the employer's contribution is also 12%, except for Admin Charges.
The employee's contribution of 12% will directly go to the Employee Provident Fund. Among the employer's 12% contribution, 3.67% will go to the Provident Fund, and 8.33% will go to the Employee Pension Scheme.
If the employers are willing to contribute based on actuals without considering the cap, then:
Basic + D.A is Rs. 10000/-
The employee's contribution of Rs. 1200/- at 12% on Basic + D.A will go to the Provident Fund, and the Employer's Contribution of Rs. 9459 will go to the Provident Fund, while Rs. 541 will go to EPS because the Employee Pension scheme has a maximum contribution limit of Rs. 541, and the remaining balance will go to the Employee Provident Fund.
If you have any further queries, please feel free to ask.
Together as a team, we can do it.
Nilesh Kumar Harge
From India, Pune
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In line with the topic, please note the following rules while calculating the Provident Fund contributions.
Basic + D.A / VDA / Special Allowance, if it exceeds Rs. 6500/-, it depends on the management whether to pay the higher employer's contribution. However, it is binding on the employer to pay the employer's contribution up to or within the limit.
If we consider that Mr. X is your employee and is drawing a Basic Salary of Rs. 10000/- per month.
In the case of capping the salary for calculation at Rs. 6500/-, the employee's contribution is 12%, and the employer's contribution is also 12%, except for Admin Charges.
The employee's contribution of 12% will directly go to the Employee Provident Fund. Among the employer's 12% contribution, 3.67% will go to the Provident Fund, and 8.33% will go to the Employee Pension Scheme.
If the employers are willing to contribute based on actuals without considering the cap, then:
Basic + D.A is Rs. 10000/-
The employee's contribution of Rs. 1200/- at 12% on Basic + D.A will go to the Provident Fund, and the Employer's Contribution of Rs. 9459 will go to the Provident Fund, while Rs. 541 will go to EPS because the Employee Pension scheme has a maximum contribution limit of Rs. 541, and the remaining balance will go to the Employee Provident Fund.
If you have any further queries, please feel free to ask.
Together as a team, we can do it.
Nilesh Kumar Harge
From India, Pune
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Dear Aarti,
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of the Act (other than the establishments declared as sick), 12% of the basic pay DA, cash value of food concession, and retaining allowance, if any, subject to a maximum of Rs. 6500/- per month.
It's binding on the employer that he has to contribute the PF for basic Rs 6500 irrespective of the higher basic than Rs 6500. PF contribution on excess basic may or may not be contributed to the PF account based on the employer's policy in this regard.
I hope this will help you to have an idea about the scheme. Even then you can visit the epfindia website for further information or email me.
With regards,
Abhijit Shete.
From India, Hyderabad
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In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of the Act (other than the establishments declared as sick), 12% of the basic pay DA, cash value of food concession, and retaining allowance, if any, subject to a maximum of Rs. 6500/- per month.
It's binding on the employer that he has to contribute the PF for basic Rs 6500 irrespective of the higher basic than Rs 6500. PF contribution on excess basic may or may not be contributed to the PF account based on the employer's policy in this regard.
I hope this will help you to have an idea about the scheme. Even then you can visit the epfindia website for further information or email me.
With regards,
Abhijit Shete.
From India, Hyderabad
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Please tell me if anybody is eligible for a deduction of PF on Rs. 15,000, and the employer has no issue with agreeing to the deduction of PF on Rs. 15,000.
Please inform me how I should proceed with the deduction of PF on Rs. 15,000 and the process for depositing it. Additionally, please let me know what should be included in a letter from the employer to the PF department.
Could you please provide me with a sample letter related to the PF department?
From India, Mumbai
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Please inform me how I should proceed with the deduction of PF on Rs. 15,000 and the process for depositing it. Additionally, please let me know what should be included in a letter from the employer to the PF department.
Could you please provide me with a sample letter related to the PF department?
From India, Mumbai
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Aarti,
If I'm not wrong, PF is to be deducted for those employees even if the basic salary exceeds Rs. 6500/- by virtue of increments (i.e., those EPF members whose salary exceeded the statutory maximum level will continue to contribute to EPF (both employee and employer), which can be restricted to the limit of Rs. 6500/-).
But for the new employees whose basic salary exceeds Rs. 6500/-, it is not mandatory.
Regards,
Leela
From India, Coimbatore
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If I'm not wrong, PF is to be deducted for those employees even if the basic salary exceeds Rs. 6500/- by virtue of increments (i.e., those EPF members whose salary exceeded the statutory maximum level will continue to contribute to EPF (both employee and employer), which can be restricted to the limit of Rs. 6500/-).
But for the new employees whose basic salary exceeds Rs. 6500/-, it is not mandatory.
Regards,
Leela
From India, Coimbatore
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What is the role of admin charge( 1.61%=1.10%+.5%+.01%) on which they are calculated, what is the importance of admin charges ankit parashar
From India, Delhi
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From India, Delhi
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Dear Sangram, I don’t follow you. What do you mean by rest of the 6 month rgds leela. . .
From India, Coimbatore
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From India, Coimbatore
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Dear Sadhanai,
The 1.1% is towards admin charges for EPF. The 0.5% is towards contribution for Employees' Deposit Linked Insurance (EDLI). The 0.01% is towards admin charges for EDLI. The above are calculated on the total salary bill (basic). Hope you are clear.
Regards,
Leela
From India, Coimbatore
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The 1.1% is towards admin charges for EPF. The 0.5% is towards contribution for Employees' Deposit Linked Insurance (EDLI). The 0.01% is towards admin charges for EDLI. The above are calculated on the total salary bill (basic). Hope you are clear.
Regards,
Leela
From India, Coimbatore
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Hi,
Is there any compulsion that employees' basic and DA must be more or equal to the minimum basic wages? As instructed by our labor consultant, we are supposed to maintain Rs. 3750/- as basic and DA. I am not clear on this point. I agree employees must be paid as per the Minimum Wages Act, but how does it apply only to Basic and DA?
Thanks and Regards,
Pooja
From India, Bangalore
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Is there any compulsion that employees' basic and DA must be more or equal to the minimum basic wages? As instructed by our labor consultant, we are supposed to maintain Rs. 3750/- as basic and DA. I am not clear on this point. I agree employees must be paid as per the Minimum Wages Act, but how does it apply only to Basic and DA?
Thanks and Regards,
Pooja
From India, Bangalore
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Hello Aarti,
Firstly, the PF deduction is taken on the basic salary, and the maximum basic is 6500. PF is a benefit provided by the organization to an employee.
Secondly, the person interested in deducting should have a basic salary above 6500. Also, explain the importance of PF in today's life, how it is useful for the individual and their family members. Even then, if the individual is not interested, you can stop the PF deduction.
From India, Chennai
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Firstly, the PF deduction is taken on the basic salary, and the maximum basic is 6500. PF is a benefit provided by the organization to an employee.
Secondly, the person interested in deducting should have a basic salary above 6500. Also, explain the importance of PF in today's life, how it is useful for the individual and their family members. Even then, if the individual is not interested, you can stop the PF deduction.
From India, Chennai
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Hi, whre u r confused please let me know i can help in this regard. Regards, Nilesh Kumar Harge _________________________ As a team we can do it.
From India, Pune
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From India, Pune
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Hi Aarthi,
Under the PF Act, the employer's contribution is for the EPF pension scheme and the Provident Fund scheme. Therefore, there is no restriction on the employer's PF contribution for your provident fund. The employer must contribute based on your basic pay, but there is no requirement to pay the full contribution for the pension scheme. Employer pension contributions are only calculated on basic pay of ₹6500 or less. If your salary is more than ₹6500, the employer's contribution may be limited to ₹6500. However, the employer must still pay for the provident fund contribution.
You should know that the employee's provident fund contribution is 12% of the basic pay, and the employer's contribution is also 12% (3.67% for PF contribution and 8.33% for pension contribution). The employer's contribution is not deducted from the employee's salary. Therefore, Aarthi, you have the right to ask them to open your PF account.
By Mani
From India
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Under the PF Act, the employer's contribution is for the EPF pension scheme and the Provident Fund scheme. Therefore, there is no restriction on the employer's PF contribution for your provident fund. The employer must contribute based on your basic pay, but there is no requirement to pay the full contribution for the pension scheme. Employer pension contributions are only calculated on basic pay of ₹6500 or less. If your salary is more than ₹6500, the employer's contribution may be limited to ₹6500. However, the employer must still pay for the provident fund contribution.
You should know that the employee's provident fund contribution is 12% of the basic pay, and the employer's contribution is also 12% (3.67% for PF contribution and 8.33% for pension contribution). The employer's contribution is not deducted from the employee's salary. Therefore, Aarthi, you have the right to ask them to open your PF account.
By Mani
From India
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PF will be deducted on the basic salary, not on the gross amount. The basic amount should be 6500/- or less. If employees are receiving more than 6500/- as their basic salary, then it will depend on the employer whether they want to provide PF facility or not.
From India, New Delhi
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From India, New Delhi
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PF calculation is based on only the Basic Salary and not on the Gross. Under the PF Act, we have a ceiling of Rs. 6500 on the basic salary. For every employee whose salary is more than Rs. 6500, they have the option/choice to avail the facility of PF deduction by filling Form 11. Therefore, it depends on the employee's basic salary.
From India, Gurgaon
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From India, Gurgaon
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Is there a rule that Basic Salary should be 50% of Gross? Can it be 25% of Gross Salary? Has it got a connection with Minimum wages act? If yes pl let me know. Thanks Preetam Mehta 97409 54666
From India, Bangalore
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From India, Bangalore
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There is no rule fixing the ratio of basic and other allowances. However, this 50% ratio is insisted upon by the authorities so that the benefits will be passed on to the employees. Otherwise, the very purpose of this social security legislation will be defeated by some employers who might show a major portion as allowances, thus deceiving the employees for whose benefit the act is enacted.
Hope I made myself clear.
Regards,
Leela
From India, Coimbatore
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Hope I made myself clear.
Regards,
Leela
From India, Coimbatore
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For HR managers, the site of 'ramadvice.wordpress.com' is good one to know financial and admin details
From India, Madras
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From India, Madras
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Hello professionals, I'm new to this site. I just want to know the benefits of a salary structure in a manufacturing company. Currently, there is no salary structure in my company, and my boss has asked me to find out the benefits of having a salary structure for both employees and employers.
From India, Pune
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From India, Pune
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Dear Queriest,
Please be aware that PF deduction has to be made for employees drawing up to Rs. 6,500 as salary/wages. (Please refer to attachments for your guidance on what constitutes wages.)
Once an employee crosses Rs. 6,500, it is at the discretion of the employee and employer whether or not to deduct PF subscriptions. There is no compulsion on either side. However, many employers choose to continue deducting subscriptions from the employee and employer's contributions even beyond Rs. 6,500 voluntarily, as a gesture, and there is no statutory liability.
There are companies that permit subscriptions from employees to their PF accounts even exceeding the permissible limits voluntarily and also allow them to either increase or decrease their subscriptions on an ad-hoc basis once or twice a year.
These extra subscriptions/contributions generally occur in employers who have set up their own PF Trust to manage the PF as 'Exempted.'
Kumar S. BG.
From India, Bangalore
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Please be aware that PF deduction has to be made for employees drawing up to Rs. 6,500 as salary/wages. (Please refer to attachments for your guidance on what constitutes wages.)
Once an employee crosses Rs. 6,500, it is at the discretion of the employee and employer whether or not to deduct PF subscriptions. There is no compulsion on either side. However, many employers choose to continue deducting subscriptions from the employee and employer's contributions even beyond Rs. 6,500 voluntarily, as a gesture, and there is no statutory liability.
There are companies that permit subscriptions from employees to their PF accounts even exceeding the permissible limits voluntarily and also allow them to either increase or decrease their subscriptions on an ad-hoc basis once or twice a year.
These extra subscriptions/contributions generally occur in employers who have set up their own PF Trust to manage the PF as 'Exempted.'
Kumar S. BG.
From India, Bangalore
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Hi Arti,
PF calculation is based on Basic Salary and not on Gross. ESI calculation is based on the Gross salary. Under the PF Act, we have a ceiling of Rs. 6,500 on basic salary. For every employee whose salary is more than Rs. 6,500, they can opt for PF deduction by filling form 11.
From India, Chandigarh
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PF calculation is based on Basic Salary and not on Gross. ESI calculation is based on the Gross salary. Under the PF Act, we have a ceiling of Rs. 6,500 on basic salary. For every employee whose salary is more than Rs. 6,500, they can opt for PF deduction by filling form 11.
From India, Chandigarh
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Sir, please solve my problem. An employee joins a company, and after one month, he dies in a road accident. Is he eligible for gratuity? If yes, please send a notification or circular related to gratuity.
Thank you.
From India, New Delhi
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Thank you.
From India, New Delhi
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Hi Hitesh, He is not eligible for gratuity because gratuity start after serving of One year to the Compnay.
From India, Chandigarh
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From India, Chandigarh
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Dear Hitesh, Pl.refer to the attachment which is self explanatory. kumar.s. bg.
From India, Bangalore
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From India, Bangalore
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The PF contribution is 12% of the Basic salary from both the employee and employer. For the calculation, the maximum limit of Basic is Rs 6500/-. This means that even if the employee's basic salary is above Rs 6500/-, the employer is liable to contribute only on the Rs 6500/-, which is Rs 780. However, if an employee so desires, he may voluntarily contribute more than 12%. Apart from this, an employer also has to pay some administration charges (approximately 13.61%).
This rule is applicable to establishments employing 20 or more persons and engaged in any of the 180 industries/classes of businesses specified. Co-operative Societies, employing 50 or more persons and working without the aid of power, also fall under this regulation. Some sectors are exempted if they have their own Fund to pay upon the retirement of the employee, which exempts them from the Act.
However, there are firms registered for PF in other states that have been deceiving the Ministry of Labour, GoI, for a long time, escaping without remitting the contributions. The PF authority turns a blind eye to this, causing the employees to suffer upon retirement or retrenchment due to non-remittance. Eventually, the authorities resort to sending arrest warrants (though making them bailable). Therefore, it is crucial to obtain the PF Number and ensure remittance from the relevant PF Office immediately after deduction. Some one-man private limited companies exploit this situation.
Additionally, some firms manipulate by showing a very low basic salary to reduce the employer's contribution, which the PF Authority neglects until "a stitch in time becomes nine or more."
From India, Kochi
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This rule is applicable to establishments employing 20 or more persons and engaged in any of the 180 industries/classes of businesses specified. Co-operative Societies, employing 50 or more persons and working without the aid of power, also fall under this regulation. Some sectors are exempted if they have their own Fund to pay upon the retirement of the employee, which exempts them from the Act.
However, there are firms registered for PF in other states that have been deceiving the Ministry of Labour, GoI, for a long time, escaping without remitting the contributions. The PF authority turns a blind eye to this, causing the employees to suffer upon retirement or retrenchment due to non-remittance. Eventually, the authorities resort to sending arrest warrants (though making them bailable). Therefore, it is crucial to obtain the PF Number and ensure remittance from the relevant PF Office immediately after deduction. Some one-man private limited companies exploit this situation.
Additionally, some firms manipulate by showing a very low basic salary to reduce the employer's contribution, which the PF Authority neglects until "a stitch in time becomes nine or more."
From India, Kochi
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Dear Franklin and other,
I am sorry to say this. There are innumerable establishments which evade PF to their employees. There is no escape for Govt.depts./co and private, all are cheats & robbers of poor employees. I worked in Govt. (state & central), PSUs, Private firms & co's. This lawlessness is ramphant every where. For the sake of employment poor people keep mum. Many PSUs engage 1000s thro contractors, terminate them after some time to avoid all these benefits, reengage them thro' some other fictitious contractors/names. These are happening in connivance of corrupt PF/ESI officials. In this private firms are some what better compared to govt. firms.
The pathetic situation is - many employer recover PF subs. from their employees but fail to remit to the PFO. In many firms employees leaving the Estt. not able to obtain their PF settlement because estts. didn't remit the contributions to the PFO.
Franklin pl.note: The PF admn./inspection charges are either payable by the PF Trusts or by the employer to the PF Commissioner and the same is not 13.61% as you mentioned. Pl.note these points:
Employer
Coverage
Establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power.
Establishments not coverable statutorily can come under the coverage of the Act statutorily.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.
Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.
Financial Obligations:
Contributions:
Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any,) in the case of 175 establishments.
Rate of contribution shall be 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector.
Establishments declared as sick undertakings by BIFR.
A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer’s share of contribution, 8.33% is to be remitted towards pension fund.
Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS’1976.
Administrative Charges:
An employer is required to pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme 1976.
No separate administrative charges for pension scheme
Inspection Charges:
In respect of exempted establishment under P.F. Scheme employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.
In the case of establishment exempted from EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.
Interest Liability:
For belated remittances of contributions, administrative / inspection charges interest at the rate of 12% on such remittances for the period of delay is to be remitted.
I hope this will be of help to you all.
For further information browse this link:
EPFO <link updated to site home>
With regards,
kumar.s.
From India, Bangalore
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I am sorry to say this. There are innumerable establishments which evade PF to their employees. There is no escape for Govt.depts./co and private, all are cheats & robbers of poor employees. I worked in Govt. (state & central), PSUs, Private firms & co's. This lawlessness is ramphant every where. For the sake of employment poor people keep mum. Many PSUs engage 1000s thro contractors, terminate them after some time to avoid all these benefits, reengage them thro' some other fictitious contractors/names. These are happening in connivance of corrupt PF/ESI officials. In this private firms are some what better compared to govt. firms.
The pathetic situation is - many employer recover PF subs. from their employees but fail to remit to the PFO. In many firms employees leaving the Estt. not able to obtain their PF settlement because estts. didn't remit the contributions to the PFO.
Franklin pl.note: The PF admn./inspection charges are either payable by the PF Trusts or by the employer to the PF Commissioner and the same is not 13.61% as you mentioned. Pl.note these points:
Employer
Coverage
Establishments employing 20 or more persons and engaged in any of the 180 industries / Classes of Businesses specified.
Co-operative Societies, employing 50 or more persons & working without the aid of power.
Establishments not coverable statutorily can come under the coverage of the Act statutorily.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.
Since the Act applies on its own force to the establishments, the employers are required to file the particulars in the specified format for registration and allotment of business number.
Financial Obligations:
Contributions:
Statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession and retaining allowances if any,) in the case of 175 establishments.
Rate of contribution shall be 10% in the case of the following:
Brick, beedi, jute, guar gum factories, coir industry other than spinning sector.
Establishments declared as sick undertakings by BIFR.
A matching contribution is to be collected from the emoluments of the employees.
Out of 12% (or 10% as the case may be) of the employer’s share of contribution, 8.33% is to be remitted towards pension fund.
Employer is also required to pay a contribution of 0.5% of the emoluments towards EDLIS’1976.
Administrative Charges:
An employer is required to pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme 1976.
No separate administrative charges for pension scheme
Inspection Charges:
In respect of exempted establishment under P.F. Scheme employer is liable to pay only inspection charges at the rate of 0.18% of emoluments.
In the case of establishment exempted from EDLI Scheme, the employer is required to pay only inspection charges at the rate of 0.005% of emoluments.
Interest Liability:
For belated remittances of contributions, administrative / inspection charges interest at the rate of 12% on such remittances for the period of delay is to be remitted.
I hope this will be of help to you all.
For further information browse this link:
EPFO <link updated to site home>
With regards,
kumar.s.
From India, Bangalore
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Hi Aarti,
As per the PF Act, it restricts the PF deduction for employees whose Basic+DA salary is Rs. 6,500. At the time of joining, an employee whose salary exceeds Rs. 6,500 can become a member of PF with mutual agreement with the employer. However, the contribution towards EPS will be 8.33% of Rs. 6,500, which is Rs. 541; the remaining amount will go to the PF.
From India, Mumbai
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As per the PF Act, it restricts the PF deduction for employees whose Basic+DA salary is Rs. 6,500. At the time of joining, an employee whose salary exceeds Rs. 6,500 can become a member of PF with mutual agreement with the employer. However, the contribution towards EPS will be 8.33% of Rs. 6,500, which is Rs. 541; the remaining amount will go to the PF.
From India, Mumbai
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Hello Aarti,
Please note:
1) For every employee whose basic is up to 6500, they need to be covered under deduction.
2) Any employee who has had his PF effect in sly shall have his PF deduction till he leaves your company. Even if his basic exceeds (due to an increment) the range of Rs 6500, you need to give him the effect of Rs 6500 as its base (maximum range).
3) The employee who is a new joinee and wants his PF deduction voluntarily, if the basic exceeds Rs 6500, then the effect should be given for 6500 only.
Hope your query is resolved to some extent. Please do guide/correct if I am wrong somewhere.
Regards,
Suman
From India, Bhuj
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Please note:
1) For every employee whose basic is up to 6500, they need to be covered under deduction.
2) Any employee who has had his PF effect in sly shall have his PF deduction till he leaves your company. Even if his basic exceeds (due to an increment) the range of Rs 6500, you need to give him the effect of Rs 6500 as its base (maximum range).
3) The employee who is a new joinee and wants his PF deduction voluntarily, if the basic exceeds Rs 6500, then the effect should be given for 6500 only.
Hope your query is resolved to some extent. Please do guide/correct if I am wrong somewhere.
Regards,
Suman
From India, Bhuj
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Dear Kaliasandeepmech12, Your query some what insufficient to offer any suggestion. Can you elaborate your query ? kumar.s.
From India, Bangalore
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From India, Bangalore
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A reputed company offers every employee various security for the future, and one of the investments for the sake of the employee is the Provident Fund, which is available when the employee becomes physically unable to work due to age. If the Chairman or MD is a gentleman, as I have seen some cheap chairmen who deduct PF from employees and do not deposit it, and even if they do deposit it, they do not provide details of the employees, as their outlook is that no employee would continue in one company for long. If a better offer comes along, the employee would leave, leaving the employer in a difficult situation. This indirectly affects good employees as well, and I am one who had to suffer for a PF membership with the Bommasandra Branch of Bangalore.
Regarding rules related to the Provident Fund, the PF site is available, which is under the Ministry of Labour. Normally, in interviews, there would not be any questions about the provident fund or workmen's compensation, as those are subjects of disinterest for employers in the private sector.
From India, Kochi
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Regarding rules related to the Provident Fund, the PF site is available, which is under the Ministry of Labour. Normally, in interviews, there would not be any questions about the provident fund or workmen's compensation, as those are subjects of disinterest for employers in the private sector.
From India, Kochi
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Dear Friends,
I have noticed numerous queries being repeatedly asked about PF. Some of these queries are addressed once again in the attachment for your ready reference. You can also find the information at the following link: [Frequently Asked questions related to Employees Provident Fund](http://taxguru.in/general-info/frequently-asked-questions-related-to-employees-provident-fund.html). Additionally, there are some important benefits from PF that have been collected from various contributors.
Kumar S.
From India, Bangalore
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I have noticed numerous queries being repeatedly asked about PF. Some of these queries are addressed once again in the attachment for your ready reference. You can also find the information at the following link: [Frequently Asked questions related to Employees Provident Fund](http://taxguru.in/general-info/frequently-asked-questions-related-to-employees-provident-fund.html). Additionally, there are some important benefits from PF that have been collected from various contributors.
Kumar S.
From India, Bangalore
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Clarification On PF Deduction For Indian Employees (International Workers) Returning From Foreig.pdf