Dear members,
Is there any rule to determine the minimum basic for PF contribution under the PF Act? What rule specifies this? If an employee has a gross salary of Rs. 15,000 per month, what should be the minimum basic so that the PF authority does not object during inspection?
Regards,
From India, Delhi
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7Is there any rule to determine the minimum basic for PF contribution under the PF Act? What rule specifies this? If an employee has a gross salary of Rs. 15,000 per month, what should be the minimum basic so that the PF authority does not object during inspection?
Regards,
From India, Delhi
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Dear Babanaresh & Ruby,
There is no rule for the breakup of Gross salary under the EPF & MP Act 1952. The breakup of Gross salary will depend on your Company policy. How will your company do the breakup of Gross salary?
As per the breakup of Gross salary, if Basic is up to Rs. 6500/-, then you should deduct PF. If Basic is above Rs. 6500/-, then it will depend upon your Company whether they want to deduct or not. If the company wants to deduct on the full basic, then they can deduct on the full basic, or they can deduct up to Rs. 6500/-.
Hope your doubt should be clear by the above explanation.
Regards, Sunil Sharma
From India, New Delhi
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There is no rule for the breakup of Gross salary under the EPF & MP Act 1952. The breakup of Gross salary will depend on your Company policy. How will your company do the breakup of Gross salary?
As per the breakup of Gross salary, if Basic is up to Rs. 6500/-, then you should deduct PF. If Basic is above Rs. 6500/-, then it will depend upon your Company whether they want to deduct or not. If the company wants to deduct on the full basic, then they can deduct on the full basic, or they can deduct up to Rs. 6500/-.
Hope your doubt should be clear by the above explanation.
Regards, Sunil Sharma
From India, New Delhi
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Hi,
Thank you for the detailed reply. It means to just avoid the PF; we can keep the basic at more than 6500/-. Please correct me if I am wrong, as most companies do not want to pay PF contributions.
Thanks & Best Regards,
Ruby Sharma
From India, Delhi
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Thank you for the detailed reply. It means to just avoid the PF; we can keep the basic at more than 6500/-. Please correct me if I am wrong, as most companies do not want to pay PF contributions.
Thanks & Best Regards,
Ruby Sharma
From India, Delhi
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Hi Ruby, You are correct. If you don’t want to deduct PF then you should keep basic more then Rs. 6500/- to avoid the PF liability from the Employer. Regards Sunil Sharma V3S Group
From India, New Delhi
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From India, New Delhi
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I think even if the basic + VDA crosses Rs6500, we need not cover it under EPF because we are being asked to pay PF on both basic and VDA. So, if both put together cross 6500, I think we may stop covering under EPF.
From India, Vijayawada
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From India, Vijayawada
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Hi all,
Two months ago, I joined an IT company where I was working as an HR and BDE. I cannot say whether I was performing well, but I was making an effort for the company's growth. I faced some issues there as employees would pass comments throughout the working day questioning the role of HR. I addressed one employee who was consistently late by sending him an email. However, my boss did not approve of it, and today, he asked me to leave the company. Furthermore, my boss paid very low salaries to the employees.
I have not received my offer letter or appointment letter yet, and I am confused as to why I was asked to leave the company abruptly. They are citing my performance as the reason for termination, claiming that I am a liability to the company. If that were the case, why were things fine before this incident? Additionally, my boss previously instructed me to manage employee attendance in an Excel sheet, which I did. However, yesterday he mentioned that it should have been kept in a register. Can someone please advise on what may be the issue?
Thank you.
From India, Gurgaon
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Two months ago, I joined an IT company where I was working as an HR and BDE. I cannot say whether I was performing well, but I was making an effort for the company's growth. I faced some issues there as employees would pass comments throughout the working day questioning the role of HR. I addressed one employee who was consistently late by sending him an email. However, my boss did not approve of it, and today, he asked me to leave the company. Furthermore, my boss paid very low salaries to the employees.
I have not received my offer letter or appointment letter yet, and I am confused as to why I was asked to leave the company abruptly. They are citing my performance as the reason for termination, claiming that I am a liability to the company. If that were the case, why were things fine before this incident? Additionally, my boss previously instructed me to manage employee attendance in an Excel sheet, which I did. However, yesterday he mentioned that it should have been kept in a register. Can someone please advise on what may be the issue?
Thank you.
From India, Gurgaon
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Dear Sir,
The basic salary shall be fixed by the company. The P.F. authorities will have nothing to do with it. They won't question anything about the basic salary. They will ensure whether the company is following the Act and Rules or not. The maximum salary for P.F. deduction is Rs. 6,500 as per the Act. However, the management can contribute more if there is any understanding with the union and the management. There is no restriction.
D. Gurumurthy LL. HR & IR Consultant
From India, Hyderabad
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The basic salary shall be fixed by the company. The P.F. authorities will have nothing to do with it. They won't question anything about the basic salary. They will ensure whether the company is following the Act and Rules or not. The maximum salary for P.F. deduction is Rs. 6,500 as per the Act. However, the management can contribute more if there is any understanding with the union and the management. There is no restriction.
D. Gurumurthy LL. HR & IR Consultant
From India, Hyderabad
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No, Ruby,
If anybody is a member of PF, it means if he contributed to PF, you cannot stop his PF even if basic+DA+VDA crosses Rs. 6500. You have to deduct up to Rs. 6500.00; it is mandatory as per the law. In Rajasthan, the minimum PF wage is Rs. 3510.00 as per the latest amendment of the labor department; you may check it out from your labor department if there is any provision of a minimum PF wage.
Sunil
From India, Bangalore
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If anybody is a member of PF, it means if he contributed to PF, you cannot stop his PF even if basic+DA+VDA crosses Rs. 6500. You have to deduct up to Rs. 6500.00; it is mandatory as per the law. In Rajasthan, the minimum PF wage is Rs. 3510.00 as per the latest amendment of the labor department; you may check it out from your labor department if there is any provision of a minimum PF wage.
Sunil
From India, Bangalore
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Sunil, I got confused because yesterday I was discussing with someone, and he told me that if the salary of any employee increases within 1 or 2 years, or maybe in 2 or 3 months, and their basic is more than Rs. 6500/-, then they can stop paying the PF contribution as the PF liability is up to basic + DA Rs. 6500/- (after mutual understanding). We can show their details in resigned employees and then continue their employment record. Can we proceed like that? Please advise.
From India, Delhi
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From India, Delhi
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Dear Sunil,
Can you provide details regarding the minimum basic for PF? If the minimum wage is 4500, is it possible to deduct PF @2200 and show the rest of the amount in HRA? Please arrange to explain.
D K Rai
From India
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Can you provide details regarding the minimum basic for PF? If the minimum wage is 4500, is it possible to deduct PF @2200 and show the rest of the amount in HRA? Please arrange to explain.
D K Rai
From India
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Dear All,
Would you please clarify the following:
1) As per the AP Shops & Estt Act, there are CL-12, SL-12 & PL-15 per calendar year.
2) As per the act, it states that the SL & PL have to be accumulated if the respective leaves are not availed.
3) Is it mandatory that we have to carry forward the unused leaves of SL & PL? Can we frame the policy that, like CL, the SL & PL should also be availed in the same calendar year. Is there any obligation?
Kindly clarify.
Thanks,
Kumar
From India, Hyderabad
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Would you please clarify the following:
1) As per the AP Shops & Estt Act, there are CL-12, SL-12 & PL-15 per calendar year.
2) As per the act, it states that the SL & PL have to be accumulated if the respective leaves are not availed.
3) Is it mandatory that we have to carry forward the unused leaves of SL & PL? Can we frame the policy that, like CL, the SL & PL should also be availed in the same calendar year. Is there any obligation?
Kindly clarify.
Thanks,
Kumar
From India, Hyderabad
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Tell me what type of help you need. Regarding the leave policy, it depends on the company policy. EL (PL) can only be carried forward up to a certain limit, and encashment of unused leave also depends on the company policy. Sick leave/Casual leave (leave with salary) is mandatory as per the act.
From India, Delhi
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From India, Delhi
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Dear Friends,
I am hiring a front office executive for my company. Her previous basic salary was 11,000/-. Now, to align with our company's level and grade, I am offering her a basic salary of 9,000/-. She has no issues with this adjustment.
I would like to confirm if this change is permissible by law.
Regards,
Sapna
From India, Ahmadabad
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I am hiring a front office executive for my company. Her previous basic salary was 11,000/-. Now, to align with our company's level and grade, I am offering her a basic salary of 9,000/-. She has no issues with this adjustment.
I would like to confirm if this change is permissible by law.
Regards,
Sapna
From India, Ahmadabad
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Dear Rai,
I think you have not seen the circular issued by PF authorities in which they clearly mentioned that any employer can't split minimum wages to reduce the PF liability, so there is no need to be confused. If minimum wages are less than the PF limit, then you should deduct PF on the actual minimum wages.
Regards,
Sunil Sharma
QUOTE=dhananjay rai;1775475]
Dear Sunil,
Can you provide details regarding the Minimum basic for PF? If minimum wages are 4500, is it possible that we will deduct PF @2200 and the rest of the amount we will show in HRA? Please arrange to explain.
D K Rai
[/QUOTE]
From India, New Delhi
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I think you have not seen the circular issued by PF authorities in which they clearly mentioned that any employer can't split minimum wages to reduce the PF liability, so there is no need to be confused. If minimum wages are less than the PF limit, then you should deduct PF on the actual minimum wages.
Regards,
Sunil Sharma
QUOTE=dhananjay rai;1775475]
Dear Sunil,
Can you provide details regarding the Minimum basic for PF? If minimum wages are 4500, is it possible that we will deduct PF @2200 and the rest of the amount we will show in HRA? Please arrange to explain.
D K Rai
[/QUOTE]
From India, New Delhi
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Dear,
It is mandatory to deduct PF for every employee who has been a PF member once. Although the employer can contribute up to Rs. 6500/- basic only, if the salary is more than Rs. 6500/-, the employer cannot stop PF deductions from the employees. They have to deposit on the account of the employee the PF on the original basic and on the part of the employer up to Rs. 6500/-.
Thank you.
From India, Indore
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It is mandatory to deduct PF for every employee who has been a PF member once. Although the employer can contribute up to Rs. 6500/- basic only, if the salary is more than Rs. 6500/-, the employer cannot stop PF deductions from the employees. They have to deposit on the account of the employee the PF on the original basic and on the part of the employer up to Rs. 6500/-.
Thank you.
From India, Indore
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Dear Anamika, You haven't mentioned in which city you are stationed? Ideally speaking, your boss asked you to keep a watch and record the attendance. He never asked you to take any action, which you have done on your own. This means you have used his power to challenge his authority.
In fact, HR, Accounts, Stores, Documentations, etc., are back-office staff, and they need to be careful while performing their duties. The boss knows whom and when to ask for deficiency and not on the spot because who and when is doing an important task is known to him. If this is challenged prematurely, it could damage the output of the organization, unless such authority is given to act independently.
From India, New Delhi
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In fact, HR, Accounts, Stores, Documentations, etc., are back-office staff, and they need to be careful while performing their duties. The boss knows whom and when to ask for deficiency and not on the spot because who and when is doing an important task is known to him. If this is challenged prematurely, it could damage the output of the organization, unless such authority is given to act independently.
From India, New Delhi
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Dear Naresh,
Yes, there is a rule for the minimum basic for PF contribution, i.e., the minimum basic should not be less than the minimum wages of the state, which is usually a component of basic + DA. This is revised from time to time by the state government. As far as bifurcation is concerned, you can follow these formulas: Basic - 50%-60% of the gross salary, HRA - 40% of the basic salary, Conveyance - Rs. 800/- (non-taxable), Edu. Cess - Rs. 200/ (Non-taxable), Med. Allowances - Rs. 1200/- (non-taxable), and the rest should be absorbed with other allowances. But keep in mind that the basic should not be less than the prescribed minimum wages of the state.
Thanks & Regards,
Sumit Kumar Saxena
+91-9899669071
From India, Ghaziabad
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Yes, there is a rule for the minimum basic for PF contribution, i.e., the minimum basic should not be less than the minimum wages of the state, which is usually a component of basic + DA. This is revised from time to time by the state government. As far as bifurcation is concerned, you can follow these formulas: Basic - 50%-60% of the gross salary, HRA - 40% of the basic salary, Conveyance - Rs. 800/- (non-taxable), Edu. Cess - Rs. 200/ (Non-taxable), Med. Allowances - Rs. 1200/- (non-taxable), and the rest should be absorbed with other allowances. But keep in mind that the basic should not be less than the prescribed minimum wages of the state.
Thanks & Regards,
Sumit Kumar Saxena
+91-9899669071
From India, Ghaziabad
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PF Contribution on not less than Minimum Wage.pdf
Splitting of Minimum Wages for the purpose of PF contribution not permissible.doc x