Can anybody guide whether we need to contribute PF admin for Voluntary PF contribution over and above Statutory,Any act reference if so please share.
From India, Coimbatore
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1From India, Coimbatore
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Administration charges are to be paid based on the actual wages on which the PF is deducted and contributed. This should include the amount of salary on which voluntary PF or PF in addition to mandatory PF is paid.
From India, Kannur
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From India, Kannur
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Please read the Provident Fund and Misc Provisions Act, 1952 and the Schemes thereto. Don’t read the section what you need. That does not make sense. read the entire Act.
From India, Kannur
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From India, Kannur
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Types of Voluntary PF
Voluntary PF may be of two types. One where both the employer and employees are contributing above the statutory limit (as of date ₹15,000 per month), and admin charges will be on the actual PF gross, say ₹20,000 per month.
There are instances where the employee is only contributing an extra percentage as VPF, but the employer is not contributing. Using the above example, the employer is contributing 12% on ₹20,000, but the employee is contributing 20% of ₹20,000, i.e., 8% extra as VPF.
Admin Charges on PF Gross
As per para 30 of the PF scheme, admin charges will be paid on PF gross, which in this case is ₹20,000, whereas the employee contribution in terms of percentage is higher.
This has been clarified by different PF offices, stating that permission should be sought before contributions are made; contributing poses no issue, etc. I am unsure about how to proceed. I am aware of some organizations where only employees contribute an extra percentage as VPF, but not the employer, and there is no provision to pay admin charges on the additional contribution of the employee's VPF since admin charges are based on PF gross and not on the percentage of contribution.
If anyone can provide further clarification on this matter, please reach out.
Thanks and Regards,
S K Bandyopadhyay (Howrah, WB)
[Email Removed For Privacy Reasons]
From India, New Delhi
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Voluntary PF may be of two types. One where both the employer and employees are contributing above the statutory limit (as of date ₹15,000 per month), and admin charges will be on the actual PF gross, say ₹20,000 per month.
There are instances where the employee is only contributing an extra percentage as VPF, but the employer is not contributing. Using the above example, the employer is contributing 12% on ₹20,000, but the employee is contributing 20% of ₹20,000, i.e., 8% extra as VPF.
Admin Charges on PF Gross
As per para 30 of the PF scheme, admin charges will be paid on PF gross, which in this case is ₹20,000, whereas the employee contribution in terms of percentage is higher.
This has been clarified by different PF offices, stating that permission should be sought before contributions are made; contributing poses no issue, etc. I am unsure about how to proceed. I am aware of some organizations where only employees contribute an extra percentage as VPF, but not the employer, and there is no provision to pay admin charges on the additional contribution of the employee's VPF since admin charges are based on PF gross and not on the percentage of contribution.
If anyone can provide further clarification on this matter, please reach out.
Thanks and Regards,
S K Bandyopadhyay (Howrah, WB)
[Email Removed For Privacy Reasons]
From India, New Delhi
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VPF Calculation Doubt
Hello everyone, I request you all to please clear my doubt on VPF calculation. I have one employee who is contributing an extra 23.56% (12% + 23.56% = 35.56%) as VPF, but the employer is only contributing 12% on the basic wage ceiling, i.e., Rs 15,000.
Right now, I'm calculating as follows:
Name EPF WAGES EPS WAGES EPF EE Share EPF ER Share EPS Contribution
XY 15000 15000 5334 550 1250
(35.56% of 15K)
Also, I'm calculating EDLI on EPF wages. Please let me know if I'm doing it right, and if not, please provide the correct calculation with an example.
From India, Pune
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Hello everyone, I request you all to please clear my doubt on VPF calculation. I have one employee who is contributing an extra 23.56% (12% + 23.56% = 35.56%) as VPF, but the employer is only contributing 12% on the basic wage ceiling, i.e., Rs 15,000.
Right now, I'm calculating as follows:
Name EPF WAGES EPS WAGES EPF EE Share EPF ER Share EPS Contribution
XY 15000 15000 5334 550 1250
(35.56% of 15K)
Also, I'm calculating EDLI on EPF wages. Please let me know if I'm doing it right, and if not, please provide the correct calculation with an example.
From India, Pune
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Hello, Sir. Thank you for your quick reply. In regards to this post, I have one more query. Should I do the calculation like this:
EPF WAGES - 44450
EPS WAGES - 15000
EDLI WAGES - 15000
So, EPF EE Share - 5334, EPF ER Share - 4084, EPS Contribution - 1250. However, in this case, why should the employer pay the extra percentage in the employee's EPF A/C, even though the basic wage ceiling is 15000? It is the employee's choice to contribute an extra percentage towards PF, but the employer is not liable to pay extra. Please suggest.
From India, Pune
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EPF WAGES - 44450
EPS WAGES - 15000
EDLI WAGES - 15000
So, EPF EE Share - 5334, EPF ER Share - 4084, EPS Contribution - 1250. However, in this case, why should the employer pay the extra percentage in the employee's EPF A/C, even though the basic wage ceiling is 15000? It is the employee's choice to contribute an extra percentage towards PF, but the employer is not liable to pay extra. Please suggest.
From India, Pune
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But sir, the employer wants to contribute to only 15000, not on a higher salary. Can I do the calculation like this:
EPF WAGES - 44450
EPS WAGES - 15000
EDLI WAGES - 15000
So, EPF EE Share - 5334, EPF ER Share - 550, EPS Contribution - 1250
Earlier, I was doing it like this:
EPF WAGES - 15000
EPS WAGES - 15000
EDLI WAGES - 15000
So, EPF EE Share - 5334, EPF ER Share - 550, EPS Contribution - 1250
Which one will be correct? (Only the employee wants to contribute more than 12%, not the employer)
From India, Pune
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EPF WAGES - 44450
EPS WAGES - 15000
EDLI WAGES - 15000
So, EPF EE Share - 5334, EPF ER Share - 550, EPS Contribution - 1250
Earlier, I was doing it like this:
EPF WAGES - 15000
EPS WAGES - 15000
EDLI WAGES - 15000
So, EPF EE Share - 5334, EPF ER Share - 550, EPS Contribution - 1250
Which one will be correct? (Only the employee wants to contribute more than 12%, not the employer)
From India, Pune
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Both are correct. Under the first one, the administration charges will increase corresponding to salary but in the second one, since the salary is less,the admin. charges will be less.
From India, Kannur
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From India, Kannur
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Key Learnings from the Discussion
So, what I learn from this discussion is:
1. An employee can contribute more than 12% as Voluntary Provident Fund (VPF) in their Provident Fund (PF) account, but the employer can contribute only 12% at the basic wage limit of ₹15,000. The employer is not liable to pay the extra percentage (EPF employee share - EPS share) towards the employee's PF account.
2. EPF wages are the wages on which the EPF share is calculated, and EPS wages are the wages on which the EPS share is calculated, with a maximum of ₹1,250. EPF wages and EPS wages can be different.
3. Employees' Deposit Linked Insurance (EDLI) is calculated on EPS wages, and PF Administration is calculated on EPF wages.
Thank you, @Madhu.T.K, sir, for sharing your knowledge.
From India, Pune
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So, what I learn from this discussion is:
1. An employee can contribute more than 12% as Voluntary Provident Fund (VPF) in their Provident Fund (PF) account, but the employer can contribute only 12% at the basic wage limit of ₹15,000. The employer is not liable to pay the extra percentage (EPF employee share - EPS share) towards the employee's PF account.
2. EPF wages are the wages on which the EPF share is calculated, and EPS wages are the wages on which the EPS share is calculated, with a maximum of ₹1,250. EPF wages and EPS wages can be different.
3. Employees' Deposit Linked Insurance (EDLI) is calculated on EPS wages, and PF Administration is calculated on EPF wages.
Thank you, @Madhu.T.K, sir, for sharing your knowledge.
From India, Pune
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As per our discussion yesterday, I prepared the ECR. However, when I uploaded it, I encountered an error stating that EPF wages cannot be greater than gross wages. The employee wishes to contribute Rs 8850 to the EPF account. Therefore, I set the EPF wages at Rs 73750 (73750*12%), while the employee's gross wages are Rs 52000. If I calculate EPF based on Rs 15000 (15000*57% = 8850), my PF admin charges will be on a lower amount. This could potentially cause issues for the PF officers.
I am now confused because we have learned that employees can contribute up to 100% of their basic salary and dearness allowance towards the VPF scheme. Does this mean that if my basic + DA is Rs 20,000, I can contribute Rs 20,000 to EPF? Or does it imply that I can contribute 12% of my total basic + DA, which amounts to Rs 20,000, making the contribution Rs 2400?
Do I need to adjust the EPF wages to achieve a 12% contribution of Rs 20,000? If so, the EPF wages would exceed the employee's gross wages. How should I calculate VPF in ECR?
Thank you.
From India, Pune
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I am now confused because we have learned that employees can contribute up to 100% of their basic salary and dearness allowance towards the VPF scheme. Does this mean that if my basic + DA is Rs 20,000, I can contribute Rs 20,000 to EPF? Or does it imply that I can contribute 12% of my total basic + DA, which amounts to Rs 20,000, making the contribution Rs 2400?
Do I need to adjust the EPF wages to achieve a 12% contribution of Rs 20,000? If so, the EPF wages would exceed the employee's gross wages. How should I calculate VPF in ECR?
Thank you.
From India, Pune
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Sir, can you help me with how I should do the calculation in ECR if an employee wants to contribute 100% of their basic + DA in EPF, given that the basic + DA is Rs. 20,000.
EPF wages - Rs. 20,000
EPS wages - Rs. 15,000
EDLI wages - Rs. 15,000
EPF EE share - ?
Could you guide me on how to calculate the EPF EE share if the employee wishes to contribute 100%?
From India, Pune
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EPF wages - Rs. 20,000
EPS wages - Rs. 15,000
EDLI wages - Rs. 15,000
EPF EE share - ?
Could you guide me on how to calculate the EPF EE share if the employee wishes to contribute 100%?
From India, Pune
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Earlier, I was calculating a higher percentage for those who opted for VPF. I kept the EPF wages at Rs 15,000 and used to calculate more than 12% of the employee's share based on 15,000 only.
EPF Wages
EPF WAGES - 15,000
EPS WAGES - 15,000
EDLI WAGES - 15,000
So, EPF EE Share - 5,334 (35.56% of 15k), EPF ER Share - 550, EPS Contribution - 1,250. However, recently when I visited the PF office, they informed me that I should change the EPF wages. I should calculate 12% on EPF wages to get Rs 5,334 as the employee contribution and calculate Admin charges on EPF wages.
From India, Pune
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EPF Wages
EPF WAGES - 15,000
EPS WAGES - 15,000
EDLI WAGES - 15,000
So, EPF EE Share - 5,334 (35.56% of 15k), EPF ER Share - 550, EPS Contribution - 1,250. However, recently when I visited the PF office, they informed me that I should change the EPF wages. I should calculate 12% on EPF wages to get Rs 5,334 as the employee contribution and calculate Admin charges on EPF wages.
From India, Pune
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EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf