Hello,
Need some help to understand the PF rules from the Employers prospective. My Company is registered since 2yrs now & they have been deducted PF of more than 100 employees till now at the standard PF rules. Since our Basic is 40% ctc (e.g 18000 - Basic), the PF deducted is 12% of 18000 = 2160.
Its been 2years we are following this policy, and my question here is that can the employer change the salary structure for deduction of PF so that less PF can be deducted for "New employees" (not changing any structure for old employees) and so that take home salary will be increased.
Can my employer restrict the PF amount to a minimum i.e 780/- without changing the basic or any other component in the structure.?
Can the employer follow two set of rules for PF deduction?
Awaiting for response. Thanks
Riddhi
From India, Mumbai
Need some help to understand the PF rules from the Employers prospective. My Company is registered since 2yrs now & they have been deducted PF of more than 100 employees till now at the standard PF rules. Since our Basic is 40% ctc (e.g 18000 - Basic), the PF deducted is 12% of 18000 = 2160.
Its been 2years we are following this policy, and my question here is that can the employer change the salary structure for deduction of PF so that less PF can be deducted for "New employees" (not changing any structure for old employees) and so that take home salary will be increased.
Can my employer restrict the PF amount to a minimum i.e 780/- without changing the basic or any other component in the structure.?
Can the employer follow two set of rules for PF deduction?
Awaiting for response. Thanks
Riddhi
From India, Mumbai
Dear Riddhi,
As per the PF Rules, The basic slab of Pf is 6500 Basic.
In this case the person those who are getting the basic of 6500 or less than that the PF will be deducted 6500*12%=780
Means as per the salary
Basic Salary *12%
And the second is Voluntary case
In this it depends on the employee whether he or she wants to deduct the pf in organization or not.
If he wants to deduct the pf then it depends on employee that how much percentage he or she wanted to deduct but the contribution of employer will be 12% only.
So now it comes to you according to your query:
They are deducting the PF on voluntary case as you might be agree to deduct the Pf. so they are deducting the 12 % of your basic salary.
From India, New Delhi
7As per the PF Rules, The basic slab of Pf is 6500 Basic.
In this case the person those who are getting the basic of 6500 or less than that the PF will be deducted 6500*12%=780
Means as per the salary
Basic Salary *12%
And the second is Voluntary case
In this it depends on the employee whether he or she wants to deduct the pf in organization or not.
If he wants to deduct the pf then it depends on employee that how much percentage he or she wanted to deduct but the contribution of employer will be 12% only.
So now it comes to you according to your query:
They are deducting the PF on voluntary case as you might be agree to deduct the Pf. so they are deducting the 12 % of your basic salary.
From India, New Delhi
To reduce PF deduction, you may have to take written consent from all of your employees.
In my opinion its better to have one set of policy only. Before reducing/changing PF deduction, you have to send written consent from all the employees to your regional PF office. You need not change Basic salary.
Regards,
Manish Bali
From India, Delhi
In my opinion its better to have one set of policy only. Before reducing/changing PF deduction, you have to send written consent from all the employees to your regional PF office. You need not change Basic salary.
Regards,
Manish Bali
From India, Delhi
As suggested by Mr Manish ,it is better to follow uniform policy for all employees from HR point of view.For new employees,if you are changing the EPF conditions, you should specify in the appointment letter that their EPF contribution will be strictly as per the EPF scheme,and get their acceptance for that.
Varghese Mathew
From India, Thiruvananthapuram
Varghese Mathew
From India, Thiruvananthapuram
Dear Friend,
I fully agree with the opinion given by Manish. You have to obtain written consent from all employees about reduction PF contribution and thereafter it is advisable to write an official letter enclosing consent letter from all employees to PF office, praying for approval . Unless you obtain a written approval from PF office, you should continue to pay PF as per current basic wages as being done. Once you obtain approval from PF office, you can reduce PF contribution as mentioned in your note under reference.
Sibabrata Majumdar
Management Consultant -Legal & HR
Mb:9830023706
From India, Calcutta
I fully agree with the opinion given by Manish. You have to obtain written consent from all employees about reduction PF contribution and thereafter it is advisable to write an official letter enclosing consent letter from all employees to PF office, praying for approval . Unless you obtain a written approval from PF office, you should continue to pay PF as per current basic wages as being done. Once you obtain approval from PF office, you can reduce PF contribution as mentioned in your note under reference.
Sibabrata Majumdar
Management Consultant -Legal & HR
Mb:9830023706
From India, Calcutta
Dear Riddhi,
If your company is not changing salary structure for present employees and if providing new structure for new joinees so that their take home will be more, there is nothing wrong in that.
As per rules, deduction after 6500/- on PF is voluntary. If your company mention what will be monthly deduction for PF in appointment letter and if new employee agrees to that by giving acknowledgement, there should not be any issue.
Regards,
Amit
From India, Pune
If your company is not changing salary structure for present employees and if providing new structure for new joinees so that their take home will be more, there is nothing wrong in that.
As per rules, deduction after 6500/- on PF is voluntary. If your company mention what will be monthly deduction for PF in appointment letter and if new employee agrees to that by giving acknowledgement, there should not be any issue.
Regards,
Amit
From India, Pune
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