hi all, Is paying PF compulsory or is there a law which states that employees getting basic above 6.5k need not be given? Waiting......... Thanks
From India, Bangalore
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From India, Bangalore
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Dear Kumar, Any organisation havin 20 - 25 employees will have compulsory PF account. All the permamanent, company employees will be given an individual PF number. Isaac Patturaja
From India, Madras
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2From India, Madras
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The PF Act defines an employee as one whose Basic plus DA is 6500 or less per month. Hence, those who earn wages more than 6500 need not be covered legally. If an employee is covered once, they will continue to be covered, and you can restrict your contribution to 6500. This is the legal position.
Siva
From India, Chennai
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Siva
From India, Chennai
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PF is must for un exempted establishments under the act Upto 6500 contribution is mandatory above 6500 is voluntary
From India, Bangalore
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From India, Bangalore
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EPF is compulsory for those establishments employing not less than 20 employees. All employees whose salary (Basic + DA) at the time of joining is not more than Rs 6500 are covered. That means an employee once covered will continue to be covered irrespective of any hike in his salary.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Dear Kumar,
Provident Fund is compulsory for all organizations employing more than 20 employees. All types of employees, irrespective of permanent, casual, etc., but drawing Rs. 6500 and less are covered. Once an employee is covered, they must continue as a member if there is any hike in their salary later on. If an employee drawing more than Rs. 6500 wishes not to be covered under PF, the management has to obtain a letter from the employee for the same.
P. RAMACHANDRAN
From India, Madras
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Provident Fund is compulsory for all organizations employing more than 20 employees. All types of employees, irrespective of permanent, casual, etc., but drawing Rs. 6500 and less are covered. Once an employee is covered, they must continue as a member if there is any hike in their salary later on. If an employee drawing more than Rs. 6500 wishes not to be covered under PF, the management has to obtain a letter from the employee for the same.
P. RAMACHANDRAN
From India, Madras
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Hi, I have a small question on this issue. Does the standard deduction of PF 12% remain the same or it changes due to hike in a salary or any other reason. Plz guide. Thanks Mehul Mehta
From India
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From India
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The standard rate of contribution/deduction remains the same, i.e., 12% irrespective of salary hike. An employee can contribute at a higher rate, i.e., more than 12%, and that is called 'voluntary contribution.' However, the employer need not contribute at a higher rate as the employee contributes voluntarily. The voluntary contribution is not related to salary. Even when the salary is less than $6500, one can opt for a higher contribution.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Dear Sir,
Please let me know if an employee in a company who is currently under the PF Policy can opt to discontinue their participation in the PF structure after a certain period. Would they then be exempted from it?
Regards,
Manjali
From India, Delhi
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Please let me know if an employee in a company who is currently under the PF Policy can opt to discontinue their participation in the PF structure after a certain period. Would they then be exempted from it?
Regards,
Manjali
From India, Delhi
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Once covered, an employee will continue to be covered under the EPF. Upon leaving the organization and joining a new company at a salary of not less than 6500, he can opt for exemption.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Hi, For employees earning Rs.6500 + as basic salary, it is voluntary. Otherwise mandatory. thanx, Sweety Singh
From India, Delhi
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From India, Delhi
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I need clarification regarding PF. If I am earning Rs 7000 as basic pay, does it mean I will be covered under PF? Is it mandatory to deduct PF from my salary, or is it voluntary? If my basic pay is Rs 7000 and I am not under PF, does it mean I am violating any rules? Also, is it advisable for my employer to show this in my salary account?
Thank you.
From India, Pondicherry
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Thank you.
From India, Pondicherry
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Dear Mr Kumar PF is not compulsory, if basic is above Rs. 6.5 k. They are coming under exempted category. The company is liable to extend PF only up to Rs. 6.5 k. Regards A Natarajan
From India, Madras
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From India, Madras
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dear mehul, The standard deduction in pf remain the same 12% is there hike in salary or not. Regards, Ashish
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On-roll employees, contractual employees, employees from outsourcing agencies, or employees based on voucher payment. Please note that we have a very new setup.
Currently, we have a total of 24 employees, out of which 3 are Japanese, 3 are drivers and office boys, and 2 are retainers.
Hope this information helps you provide suggestions.
Regards,
Garima
From Japan
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Currently, we have a total of 24 employees, out of which 3 are Japanese, 3 are drivers and office boys, and 2 are retainers.
Hope this information helps you provide suggestions.
Regards,
Garima
From Japan
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Hi all,
Is paying PF compulsory or is there a law which states that employees getting basic above 6.5k need not be given? Waiting.........
Thanks
As per the PF Act, irrespective of the number of employees in a company, an employee drawing a basic salary exceeding Rs 6,500/- is excluded from the provisions under section 2(f). Companies can voluntarily cover him or leave him the option at the time of joining. Once he becomes a member of PF and later his basic pay exceeds Rs 6,500/-, he will have to continue under PF cover. We follow this policy in our company as pay scales are worked on a CTC basis.
From India, Mumbai
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Is paying PF compulsory or is there a law which states that employees getting basic above 6.5k need not be given? Waiting.........
Thanks
As per the PF Act, irrespective of the number of employees in a company, an employee drawing a basic salary exceeding Rs 6,500/- is excluded from the provisions under section 2(f). Companies can voluntarily cover him or leave him the option at the time of joining. Once he becomes a member of PF and later his basic pay exceeds Rs 6,500/-, he will have to continue under PF cover. We follow this policy in our company as pay scales are worked on a CTC basis.
From India, Mumbai
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Hi Mehul,
12% remains the same. Suppose an employee wishes to contribute more than 12%, they have to inform the HR Department, but the percentage should not exceed 12%. I hope you understand. If you have any confusion, please feel free to reply.
Regards,
Kripa
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12% remains the same. Suppose an employee wishes to contribute more than 12%, they have to inform the HR Department, but the percentage should not exceed 12%. I hope you understand. If you have any confusion, please feel free to reply.
Regards,
Kripa
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12% remains the same. If an employee wishes to contribute more than 12%, they have to inform the HR Department, but that percentage should not exceed 12%. I hope you understand. If there is any confusion, please feel free to reply.
Hi, may I know how it will work? Will the extra 12% be on the basic salary or any other salary structure?
Regards,
Vijay
From India, Hyderabad
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Hi, may I know how it will work? Will the extra 12% be on the basic salary or any other salary structure?
Regards,
Vijay
From India, Hyderabad
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Hi,
If there are a total of 20 employees, with 15 employees having a basic salary higher than 6500/- and choosing not to opt for PF deduction, while 5 employees have a basic salary below 6500, is it necessary and mandatory to take PF numbers for these 5 employees or for the total number of employees, which is either 20 or 5?
Please advise.
Thanks,
Uttama
From India, Mumbai
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If there are a total of 20 employees, with 15 employees having a basic salary higher than 6500/- and choosing not to opt for PF deduction, while 5 employees have a basic salary below 6500, is it necessary and mandatory to take PF numbers for these 5 employees or for the total number of employees, which is either 20 or 5?
Please advise.
Thanks,
Uttama
From India, Mumbai
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Dear Mehul,
The standard rate of Cont. (12%) does not change with the hike in salary, whereas the sum of contribution will hike on the new rates. However, you can block the deductions only up to 6500/-, whatever the basic of an employee may be, but that has to be a part of the uniform policy of the organization.
On the other hand, an individual can pay his contribution at a higher rate than 12% on a special request to the HR department, but the employer contribution will stick to 12% only.
Thanks,
Rahul
From India, Delhi
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The standard rate of Cont. (12%) does not change with the hike in salary, whereas the sum of contribution will hike on the new rates. However, you can block the deductions only up to 6500/-, whatever the basic of an employee may be, but that has to be a part of the uniform policy of the organization.
On the other hand, an individual can pay his contribution at a higher rate than 12% on a special request to the HR department, but the employer contribution will stick to 12% only.
Thanks,
Rahul
From India, Delhi
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If employee wants to contribute more than 12% it is again limited only to 12% of Basic not more than that. kripa
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That Means as a total he can contribute up to 24% of his Basic 12% — — Statutory 12% — — - Voluntarily and in addition 12% of Employer. Pls. Correct if Wrong. Thanks, Rahul
From India, Delhi
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From India, Delhi
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If employee voluntarily wishes to pay more than 12% it is again limited only to 12% of basic not more than that
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ya employee needs to declare he/she wants to deduct his Pf on Gross not on basic ,so definitely his contribution would be increase,but any case contribution is 12%.but total ammount will be increase.
From India, Ahmadabad
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From India, Ahmadabad
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Hi Manjali,
I am Vishwa Sehgal, the Head of Human Resources at an international BPO. In response to your query, the option to withdraw and cease paying can only be exercised with the Personal Provident Fund.
According to company regulations, once the PF deduction is made and the employee's salary is below 6500/-, it is compulsory to continue with the PF deduction. However, if the salary bracket increases, the employee has the choice to contribute the same amount instead of the standard 12% of the basic salary.
Please feel free to reach out to me via email or call me at 9967573663.
Take care,
Vishwa
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I am Vishwa Sehgal, the Head of Human Resources at an international BPO. In response to your query, the option to withdraw and cease paying can only be exercised with the Personal Provident Fund.
According to company regulations, once the PF deduction is made and the employee's salary is below 6500/-, it is compulsory to continue with the PF deduction. However, if the salary bracket increases, the employee has the choice to contribute the same amount instead of the standard 12% of the basic salary.
Please feel free to reach out to me via email or call me at 9967573663.
Take care,
Vishwa
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Dear Mehul Mehta If you want to contribute more than there is no problem but the contribution of the Employer will remain same. Darshak Mehta
From India, Mumbai
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From India, Mumbai
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Dear Mr. Kumar,
Yes, PF deduction is compulsory. There is a Statutory Act regarding the PF, that is "The Employees' Provident Fund and Miscellaneous Provisions Act."
The major benefit of PF coverage is that if an employee works for even one day and unfortunately passes away, their dependent spouse will receive a pension for their entire life. Additionally, two children will receive a minimum amount for their education until they reach the age of 21 for boys and 25 for girls.
I hope you now have a better understanding of the benefits of PF coverage.
Regards, KARANLAL Manager, HR & Admin
From India, Hyderabad
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Yes, PF deduction is compulsory. There is a Statutory Act regarding the PF, that is "The Employees' Provident Fund and Miscellaneous Provisions Act."
The major benefit of PF coverage is that if an employee works for even one day and unfortunately passes away, their dependent spouse will receive a pension for their entire life. Additionally, two children will receive a minimum amount for their education until they reach the age of 21 for boys and 25 for girls.
I hope you now have a better understanding of the benefits of PF coverage.
Regards, KARANLAL Manager, HR & Admin
From India, Hyderabad
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Where the number of employees is 20, the establishment will be covered. However, contributions in respect of those 5 employees whose salary is below 6500 will have to be deducted and contributed.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Dear Kumars, Please click o0n the link below, it might be of help to you: Regards, SC
From India, Thane
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From India, Thane
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Dear All,
I have a doubt in PF. I am aware that Basic or Basic + DA = 6500, the contribution can be exempted. But what is the role of the Minimum Wages Act on this part? Is there any rule specifying the amount the basic and DA should be? Please advise.
Thanks,
Pandey
From India, Mumbai
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I have a doubt in PF. I am aware that Basic or Basic + DA = 6500, the contribution can be exempted. But what is the role of the Minimum Wages Act on this part? Is there any rule specifying the amount the basic and DA should be? Please advise.
Thanks,
Pandey
From India, Mumbai
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Hi Smitaa,
I am receiving many confusing inputs regarding PF. We are a small organization with 25 employees. Most of them have a basic salary higher than 6500. We do not have DA. So, is PF registration mandatory?
Secondly, one of my friends informed me that PF is not compulsory for the first three operating years of any organization. Is this true?
Thanks,
Smitaa
From India, Mumbai
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I am receiving many confusing inputs regarding PF. We are a small organization with 25 employees. Most of them have a basic salary higher than 6500. We do not have DA. So, is PF registration mandatory?
Secondly, one of my friends informed me that PF is not compulsory for the first three operating years of any organization. Is this true?
Thanks,
Smitaa
From India, Mumbai
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An organization with 25 employees will be covered by EPF. Since all are drawing a salary not less than 6500, the employees are not covered. However, monthly returns in Form 12 and annual returns in Form 3A are to be filed.
There is no infancy protection now available.
Regards, Madhu.T.K
From India, Kannur
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There is no infancy protection now available.
Regards, Madhu.T.K
From India, Kannur
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in that case pension amonut is same alredy deposited , on the basis increase basic as arrear calcultion 12% will be deposit.
From India, New Delhi
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From India, New Delhi
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Dear All, Please let me know if a company, which is a Proprietor ship, is it compulsory to have a pf account or it depends solely on the owner’s decision? Please let me know....
From India, Kakinada
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From India, Kakinada
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Dear All,
Greetings!
I am working with Essar. With reference to the expert advice of Ms. Madhu regarding the compulsion of PF, once an employee is covered, they will continue to be covered under the EPF. Upon leaving the organization and joining a new company with a salary of not less than 6500, they can opt for exemption.
I have observed a case in which PF membership is being discontinued at the employee's request. His contribution was sent for a month, and he is still an employee of this organization.
Could you please advise if this action complies with the law? If not, can the PF authorities verify this, and what could be the potential consequences?
Thank you in anticipation.
Regards,
Janki Jani
From India, Mumbai
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Greetings!
I am working with Essar. With reference to the expert advice of Ms. Madhu regarding the compulsion of PF, once an employee is covered, they will continue to be covered under the EPF. Upon leaving the organization and joining a new company with a salary of not less than 6500, they can opt for exemption.
I have observed a case in which PF membership is being discontinued at the employee's request. His contribution was sent for a month, and he is still an employee of this organization.
Could you please advise if this action complies with the law? If not, can the PF authorities verify this, and what could be the potential consequences?
Thank you in anticipation.
Regards,
Janki Jani
From India, Mumbai
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Dear Jani,
The same is not correct as per PF rules; once a member will always be a member, even if his salary increases from 6500 to 15,000/-. His contribution is payable on 6500/-. But once the member withdraws the PF amount and settles his/her account with the PF department, then he/she will cease to be a member of the PF Fund. The example given by you may cause a problem for the employer; the contribution is liable to be paid in respect of such a member and cannot be discontinued.
You can do one thing: ask the member for resignation and withdraw his/her PF amount. Then, upon a fresh appointment with a salary more than Rs. 6500/-, have the member fill out Form 11, stating, "I am not a member of PF amount." However, it amounts to unfair labor practice as you deprive him of benefits pertaining to continuity of service. I hope this satisfies your query.
Regards,
Janki Jani
From India, Delhi
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The same is not correct as per PF rules; once a member will always be a member, even if his salary increases from 6500 to 15,000/-. His contribution is payable on 6500/-. But once the member withdraws the PF amount and settles his/her account with the PF department, then he/she will cease to be a member of the PF Fund. The example given by you may cause a problem for the employer; the contribution is liable to be paid in respect of such a member and cannot be discontinued.
You can do one thing: ask the member for resignation and withdraw his/her PF amount. Then, upon a fresh appointment with a salary more than Rs. 6500/-, have the member fill out Form 11, stating, "I am not a member of PF amount." However, it amounts to unfair labor practice as you deprive him of benefits pertaining to continuity of service. I hope this satisfies your query.
Regards,
Janki Jani
From India, Delhi
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Provident Fund - Excluded Employee - Definition.pdf
What is Employee Provident Fund.docx