Hi everyone,
Our company plans to introduce PF to all employees from April 2024 onwards. I would like to know if the following suggestions are legally accepted:
1) As we need to revise the salary break up with existing CTC only, we are planning to make the employer contribution fixed as 1800/-.
2) Employee contribution, giving choice to employees - 12% of basic or 1800/-. (high salaried employees can opt 1800 if they don't want to contribute more)
thank you!
regards
Rincy Josy
From India, Kottayam
Our company plans to introduce PF to all employees from April 2024 onwards. I would like to know if the following suggestions are legally accepted:
1) As we need to revise the salary break up with existing CTC only, we are planning to make the employer contribution fixed as 1800/-.
2) Employee contribution, giving choice to employees - 12% of basic or 1800/-. (high salaried employees can opt 1800 if they don't want to contribute more)
thank you!
regards
Rincy Josy
From India, Kottayam
Hi Rincy,
The plan to introduce PF to all employees from April 2024 onwards. We understand that you have certain suggestions regarding the salary break up and employee contribution. We would like to inform you that the Employee Provident Fund Act, 1952, governs the PF scheme in India, and any changes to the scheme must comply with the provisions of the Act.
Regarding your first suggestion, it is legally acceptable to fix the employer contribution at a specific amount, provided it is not less than the minimum contribution prescribed under the Act. However, it is important to note that the employer contribution must be 12% of the employee's basic salary, dearness allowance, and retaining allowance (if any).
As for your second suggestion, it is permissible to give employees a choice between contributing 12% of their basic salary or a fixed amount of 1800/-. However, employees who earn a higher salary may choose to opt for the fixed amount if they do not wish to contribute more.
Thanks,
From India, Bangalore
163The plan to introduce PF to all employees from April 2024 onwards. We understand that you have certain suggestions regarding the salary break up and employee contribution. We would like to inform you that the Employee Provident Fund Act, 1952, governs the PF scheme in India, and any changes to the scheme must comply with the provisions of the Act.
Regarding your first suggestion, it is legally acceptable to fix the employer contribution at a specific amount, provided it is not less than the minimum contribution prescribed under the Act. However, it is important to note that the employer contribution must be 12% of the employee's basic salary, dearness allowance, and retaining allowance (if any).
As for your second suggestion, it is permissible to give employees a choice between contributing 12% of their basic salary or a fixed amount of 1800/-. However, employees who earn a higher salary may choose to opt for the fixed amount if they do not wish to contribute more.
Thanks,
From India, Bangalore
Dear Raghunath_bv sir, Iam very impressed by your concern about clarifying some one doubts in this forum for lot of persons. Keep helping like this always sir, very kind of you. Thanks Pandian p
From India, Madurai
From India, Madurai
Can I interpret the post as follows that you do not have PF coverage at present. If so, let me say that you can not 'plan to introduce' PF from a certain future date, ie, April 2024. It will be introduced automatically, per se, from the date on which the number of employees in your establishment becomes 20. The rest are okay. You can restrict your contribution at Rs 1800 and the employees can either contribute on a maximum salary of Rs 15000 or opt for contribution on any higher salary.
If you are already covered (my second interpretation of the post) but you give coverage only to those whose salary (PF qualifying salary) is Rs 15000 or less, but would like to give coverage to all employees irrespective of their salary, then it is fine, you can start contributing PF to all the employees from a future date, say, April 2024. In such case, you can take the opinion of employees and decide who all will be contributing on actual salary and who all shall continue to contribute on 15000 only. That is fine. You can have two set of employees, those contributing on Rs 15000 only and those contributing on higher than Rs 15000.
From India, Kannur
If you are already covered (my second interpretation of the post) but you give coverage only to those whose salary (PF qualifying salary) is Rs 15000 or less, but would like to give coverage to all employees irrespective of their salary, then it is fine, you can start contributing PF to all the employees from a future date, say, April 2024. In such case, you can take the opinion of employees and decide who all will be contributing on actual salary and who all shall continue to contribute on 15000 only. That is fine. You can have two set of employees, those contributing on Rs 15000 only and those contributing on higher than Rs 15000.
From India, Kannur
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls
PF ON LEAVE SALARY.jpg