Hii, m working as HR in a firm, which is just started up, pl clarify my doubts regarding PF, is it mandatory that pf amount should not be exceeded more than 1800, if an employee is having 36000 as basic
From India, New Delhi
From India, New Delhi
Hi If anything contributing above the ceiling limit then in can be considered as Voluntary Contribution
From India, Bangalore
639From India, Bangalore
Dear Richa,
The EPF amount of Employee Contribution can be deducted @ 12% on the Basic+DA. There is no limit for that. But in the Pension Fund can be deposited
Rs. 1250/- (8.33% of 15000) , however the balance amount will be deposited under EPF (Employer Contribution).
The notable point is here you have to make higher payment towards Employer Contribution as well. Though you can show that amount in CTC.
There is auto calculation in portals, so you need not to worry about the calculation part.
But there will be higher payment for EDLI (A/c No. 21) & Admin charhges (A/c No. 2 & 22) as well. If the employees are not so much, you can go with that.
But once you start depositing PF on higher Basic, you can't reduce the same. More basic attracts high cost in other statutory as well (Bonus, Leave, Gratuity, Compensation etc.).
As you specified yours is a "just started up", pls take management approval whether they have proper fund allocation towards the same.
From India, Delhi
The EPF amount of Employee Contribution can be deducted @ 12% on the Basic+DA. There is no limit for that. But in the Pension Fund can be deposited
Rs. 1250/- (8.33% of 15000) , however the balance amount will be deposited under EPF (Employer Contribution).
The notable point is here you have to make higher payment towards Employer Contribution as well. Though you can show that amount in CTC.
There is auto calculation in portals, so you need not to worry about the calculation part.
But there will be higher payment for EDLI (A/c No. 21) & Admin charhges (A/c No. 2 & 22) as well. If the employees are not so much, you can go with that.
But once you start depositing PF on higher Basic, you can't reduce the same. More basic attracts high cost in other statutory as well (Bonus, Leave, Gratuity, Compensation etc.).
As you specified yours is a "just started up", pls take management approval whether they have proper fund allocation towards the same.
From India, Delhi
I have a disagreement with Pan Singh on the following:
1. There will be higher payments for EDLI: For calculation of EDLI, the salary can be subjected to a maximum of Rs 15000. That means no need to pay EDLI for the entire 36000.
2. Once you start depositing PF on higher salary, you cannot reduce the same: You can reduce it to Rs 15000, provided the employees agree. The PF authorities cannot demand that since you have been contributing PF on Rs 36000, you should continue to deposit it on 36000 and you cannot reduce it to Rs 15000. PF authorities cannot say that in such cases section 12 of the Act which says that the employer cannot reduce the wages inorder to reduce their PF contribution. In Maratwada Gramin bank's case the Apex Court has ruled that PF Organisation has no authority to require the employer to contribute PF on salalry above Rs 6500 ( at the time the limit was 6500 and therefore, you can make it 15000 now)
In CTC terms, as the contribution payable by the employer is shown as part of total remuneration, reducing the contribution will lead to reduce the remuneration of employee and therefore, without taking the employees into confident, you should not do that. In the case of workers (who are covered by Industrial Disputes Act, obviously, notice as per section 9A will also be required to be served before enforcing such changes.
Madhu.T.K
From India, Kannur
1. There will be higher payments for EDLI: For calculation of EDLI, the salary can be subjected to a maximum of Rs 15000. That means no need to pay EDLI for the entire 36000.
2. Once you start depositing PF on higher salary, you cannot reduce the same: You can reduce it to Rs 15000, provided the employees agree. The PF authorities cannot demand that since you have been contributing PF on Rs 36000, you should continue to deposit it on 36000 and you cannot reduce it to Rs 15000. PF authorities cannot say that in such cases section 12 of the Act which says that the employer cannot reduce the wages inorder to reduce their PF contribution. In Maratwada Gramin bank's case the Apex Court has ruled that PF Organisation has no authority to require the employer to contribute PF on salalry above Rs 6500 ( at the time the limit was 6500 and therefore, you can make it 15000 now)
In CTC terms, as the contribution payable by the employer is shown as part of total remuneration, reducing the contribution will lead to reduce the remuneration of employee and therefore, without taking the employees into confident, you should not do that. In the case of workers (who are covered by Industrial Disputes Act, obviously, notice as per section 9A will also be required to be served before enforcing such changes.
Madhu.T.K
From India, Kannur
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls