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In some service providers' companies, PF is not deducted from the gross salary. Please tell me, is this legal or not? It means if the salary of one employee is less than 20k per month, PF is mandatory to deduct, and if one's salary per month is above 20k, then PF is not mandatory to deduct. Kindly give me the appropriate reply to better understand the concept of PF.
From India, Delhi
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Hello there,

Every company that is registered with the Shops and Establishment Act or Factories Act has to contribute to their PF and their employees' PF every month (this is only applicable if the employee count is more than 20) - it is a statutory law. The current slab of PF is 21,000 or equal. People whose salary is more than that can voluntarily apply for PF to continue the service.

From India, Hyderabad
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But my company has more than 20 employees. Recently, our Managing Director has decided not to contribute to the Provident Fund (PF) for employees whose salary exceeds 20k per month, specifically for new joiners. However, for those employees who are already contributing to PF, they cannot be removed from the scheme midway and must continue to contribute. Additionally, my company is currently engaged with a third party for the submission of PF and ESIC challans since there was previously no dedicated HR personnel. Is it possible for the company to continue submitting the PF and ESIC challans through the third party even with an in-house HR person now? Would this result in extra costs for the company despite having an HR department? In my opinion, I suggest that the company reconsider its association with the third party to avoid incurring additional expenses, especially considering the presence of an HR person within the company.
From India, Delhi
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Hi Charu,

I have heard that nowadays in a few companies, PF-ESI work is handled by accountants or CAs. Some companies have HR professionals who handle this work. Therefore, I believe it is up to the management to decide who they want to assign this task to.

Regards,
Veronica Singh
HR

From India, Ludhiana
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Dear, As above reply, it is management will. There is a small thing of making the pf payment as the salary for 15k, even if it is above 20k. M.Kumar. HR Executive.
From India, Nellore
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If you don’t want contribute towards PF, then you can submit form-11 for all your employees to exempt from PF. Basic limit 15k not 21k, just for your information.
From India, Chennai
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Sampathkumar Sir, please elaborate the use of form 11 Thanks and Regards Gopal Pachimuthu HR Executive
From India, Chennai
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Dear Concerned,

PF will be deducted based on the basic value. If an employee's basic is 15500, PF will not be deducted. We can deduct on the same value as well, but it depends on the company. If an employee's basic is 14900, PF will definitely be deducted at 12%.

Thanks,
Nitin Sharma

From India, Delhi
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Basic limit is above 15k , then you can submit form-11 for all your employees to exempt from PF.
From India, Ramanathapuram
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Hi Charu,

As per the above discussion, I just need to add one more point. Even after the whole payroll and PF matters are handled by third-party agencies, we still need to keep a close eye on them. In the last two years, I faced a problem where the third-party agencies did not have proper PF and ESIC numbers. They also submitted fake PF, UAN, and ESIC numbers. We conducted a secret investigation directly with the PF department and discovered that most of the UAN numbers were fake.

The issue now is that the workers do not understand how to manage their UAN or access it. Therefore, as HR personnel, we must monitor the agencies closely. We should request them to regularly submit PF and ESIC challans on a monthly basis. Additionally, we can verify these submissions ourselves.

Regards,
Jinu Mathews
HR Executive

From India, Jaipur
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