Dear Friends,
Please give me clarification regarding PF contribution by employees. One of my clients' companies is deducting only Rs.780 from the employee and also contributing Rs.780 from the company's side. Is there any rule stating that the employer can only deduct Rs.780 from the employee? Or should 12% be deducted? Normally, the employee will contribute 12% of the basic salary, and the employer has the option to contribute Rs.780 if the employee's basic salary is Rs.6500 or above, or 12%.
Please clarify.
Regards,
Krishna T B R
From India, Hyderabad
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3Please give me clarification regarding PF contribution by employees. One of my clients' companies is deducting only Rs.780 from the employee and also contributing Rs.780 from the company's side. Is there any rule stating that the employer can only deduct Rs.780 from the employee? Or should 12% be deducted? Normally, the employee will contribute 12% of the basic salary, and the employer has the option to contribute Rs.780 if the employee's basic salary is Rs.6500 or above, or 12%.
Please clarify.
Regards,
Krishna T B R
From India, Hyderabad
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Hi, It depends on co. to co. Many co’s fix their PF amount which 780/- and many co’s make the contribution on actual basic amount. Both are optional.
From India, Pune
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From India, Pune
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Dear Krishna TBR,
The statutory obligation is 12% on salary up to the ceiling limit, which is currently Rs. 6500 per month. Beyond the ceiling limit, it is optional but subject to the will and wish of the employee and employer.
Abbas.P.S
From India, Bangalore
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The statutory obligation is 12% on salary up to the ceiling limit, which is currently Rs. 6500 per month. Beyond the ceiling limit, it is optional but subject to the will and wish of the employee and employer.
Abbas.P.S
From India, Bangalore
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If PF contribution of Rs. 780/- is deducted from the employee by the employer, then it means the company is meeting a statutory obligation according to the Employees Provident Fund & Miscellaneous Provisions Act, 1952. However, employees can opt for a higher rate than 12% as their contribution, and such additional contribution goes to VPF. Companies can choose to make a contribution of a higher amount than the ceiling amount of Rs. 6500/-, but this is purely optional, not compulsory.
Thanks
R K Nair
From India, Aizawl
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Thanks
R K Nair
From India, Aizawl
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SC Judgment-No obligation to excess contribution than Statutory Limit.docx
PF Contribution on Leave Encashment - Clarification by EPFO.pdf