Hello All, I'm working as HR consultant in one of the service based company and I wanted clarification regarding the provident fund, we as an organization are deducting the Rs.1800 PF from the employees and from employer keeping the 15,000 as basic and but now we are about to hire a software engineer to one of our client projects and he wants the PF to be deducted on his basic since his CTC is more.
So, i just wanted to know:
1. Can we go ahead and have his pf deduction based on his basic as per his request?
2. Is it mandated for the employer as well to contribute the same PF as the employee
3. or we can only deduct the PF as per the employee's wish and we can deduct 1800 from the employer
4. And will it be an issue for other employees if we can go ahead with this arrangement as an exception for this employee
From India, Bengaluru
1So, i just wanted to know:
1. Can we go ahead and have his pf deduction based on his basic as per his request?
2. Is it mandated for the employer as well to contribute the same PF as the employee
3. or we can only deduct the PF as per the employee's wish and we can deduct 1800 from the employer
4. And will it be an issue for other employees if we can go ahead with this arrangement as an exception for this employee
From India, Bengaluru
Yes, you can deduct the software engineer's PF based on his requested basic salary.
Yes, it is mandatory for the employer to contribute the same PF amount as the employee.
You can deduct the PF amount based on the employee's wish and also contribute Rs. 1800 from the employer's side.
It shouldn't be an issue for other employees if you treat this arrangement as an exception for the software engineer.
From India, Bhubaneswar
Yes, it is mandatory for the employer to contribute the same PF amount as the employee.
You can deduct the PF amount based on the employee's wish and also contribute Rs. 1800 from the employer's side.
It shouldn't be an issue for other employees if you treat this arrangement as an exception for the software engineer.
From India, Bhubaneswar
Hi,
Employer and Employee on mutual consent may contribute on actual basic instead of restricting it to Rs.18000/-. However it has be equal share. If employee is more keen of saving money in PF you may suggested the employee about VPF.
From India, Madras
Employer and Employee on mutual consent may contribute on actual basic instead of restricting it to Rs.18000/-. However it has be equal share. If employee is more keen of saving money in PF you may suggested the employee about VPF.
From India, Madras
You have to compulsory deduct PF, based on statutory limit (Rs.15000/-). Over and above, if employee
desires to make more savings in PF, he can opt for VPF (Voluntary Provident Fund) wherein he (employee) need to contribute more to PF, but employer's contribution is based on statutory limit, as also suggested by our member.
From India, Aizawl
desires to make more savings in PF, he can opt for VPF (Voluntary Provident Fund) wherein he (employee) need to contribute more to PF, but employer's contribution is based on statutory limit, as also suggested by our member.
From India, Aizawl
Please be noted that EPF is not only on the Basic wages it includes even on the other allowances which is commonly paid as wages other than HRA.
If at all any employees Basic is above Rs. 15,000/- then the same shall be restricted to Rs. 15,000 & shall contribute Rs. 1800/- towards EPF Contribution & also see whether every one is entitled for EPS Contribution.
1) Yes you can consider EPF in his entire Basic wages with out ceiling limit which is as per the employment contract & better to have one joint declaration.
2) Employer may restrict to Rs. 15000/- or equal amount of the employee contribution
From India, Bangalore
If at all any employees Basic is above Rs. 15,000/- then the same shall be restricted to Rs. 15,000 & shall contribute Rs. 1800/- towards EPF Contribution & also see whether every one is entitled for EPS Contribution.
1) Yes you can consider EPF in his entire Basic wages with out ceiling limit which is as per the employment contract & better to have one joint declaration.
2) Employer may restrict to Rs. 15000/- or equal amount of the employee contribution
From India, Bangalore
Hi Manasa,
Please note that the PF ceiling is 12% and it amount Rs, 1,800/- on Rs.15,000/-you go ahead with PF deduction and the employer is mandated to contribute the equal amount. Ft his arrangement will not coincide with the arrangements of the other employee.
Regards
From India, Bangalore
Please note that the PF ceiling is 12% and it amount Rs, 1,800/- on Rs.15,000/-you go ahead with PF deduction and the employer is mandated to contribute the equal amount. Ft his arrangement will not coincide with the arrangements of the other employee.
Regards
From India, Bangalore
I think your post has some confusion. It looks like that he engineer is trying to reduce his PF contribution, not increase it.
The rules you need to follow is as below :
1. You need to deduct 12% from his wages, defined as gross (-) HRA and OT. Any other allowance that is not given to all, not mandatory and given only to defray special expenses of working at that place, will be eligible for deduction from gross wages to get to PF wages. So it is definitely not on "Basic" as you defined it, but as per the Supreme Court order of Feb 2019
2. The ceiling of salary for computation of PF is ₹ 15,000 a month. So if the computed PF is more than ₹ 1,800, then you are required to deduct only 1,800 and give an equal amount from the employer's side.
3. If the employee wants to contribute higher, he needs to give a letter, asking for additional amount to be deducted as Voluntary PF. However, total deduction under all heads can not exceed 50% of gross wages excluding overtime.
4. The employer is under no obligation to match the PF deduction beyond 1,800 per month but can do it if it so wants.
From India, Mumbai
The rules you need to follow is as below :
1. You need to deduct 12% from his wages, defined as gross (-) HRA and OT. Any other allowance that is not given to all, not mandatory and given only to defray special expenses of working at that place, will be eligible for deduction from gross wages to get to PF wages. So it is definitely not on "Basic" as you defined it, but as per the Supreme Court order of Feb 2019
2. The ceiling of salary for computation of PF is ₹ 15,000 a month. So if the computed PF is more than ₹ 1,800, then you are required to deduct only 1,800 and give an equal amount from the employer's side.
3. If the employee wants to contribute higher, he needs to give a letter, asking for additional amount to be deducted as Voluntary PF. However, total deduction under all heads can not exceed 50% of gross wages excluding overtime.
4. The employer is under no obligation to match the PF deduction beyond 1,800 per month but can do it if it so wants.
From India, Mumbai
You can go ahead and have the PF deduction for the software engineer based on his basic salary as per his request. The Employee Provident Fund (EPF) allows employees to contribute a higher percentage of their basic salary to the EPF voluntarily. In this case, the software engineer can choose to contribute more than the default 12% of his basic salary to the EPF.
Yes, it is mandated for the employer to contribute the same PF as the employee. The employer is required to match the employee's contribution to the EPF. The total contribution, which includes both the employee's and employer's share, should be deposited into the employee's EPF account.
No, the employer cannot deduct a fixed amount of Rs.1800 from the employer's side only. The employer's contribution to the EPF should be equal to the employee's contribution. If the software engineer is contributing more than the default 12% of his basic salary, the employer's contribution should also be increased proportionately.
It may not be an issue for other employees if you make this arrangement as an exception for the software engineer. The EPF allows employees to voluntarily contribute a higher percentage of their basic salary to the EPF, so other employees may also choose to do so if they wish. However, it is essential to ensure that the EPF contributions for all employees, including the software engineer, are calculated and deposited correctly to comply with EPF regulations.
It is advisable to consult with your organization's HR or finance department and also with a legal or financial expert to ensure that you are adhering to EPF regulations and making the necessary adjustments for the software engineer's request appropriately.
Yes, it is mandated for the employer to contribute the same PF as the employee. The employer is required to match the employee's contribution to the EPF. The total contribution, which includes both the employee's and employer's share, should be deposited into the employee's EPF account.
No, the employer cannot deduct a fixed amount of Rs.1800 from the employer's side only. The employer's contribution to the EPF should be equal to the employee's contribution. If the software engineer is contributing more than the default 12% of his basic salary, the employer's contribution should also be increased proportionately.
It may not be an issue for other employees if you make this arrangement as an exception for the software engineer. The EPF allows employees to voluntarily contribute a higher percentage of their basic salary to the EPF, so other employees may also choose to do so if they wish. However, it is essential to ensure that the EPF contributions for all employees, including the software engineer, are calculated and deposited correctly to comply with EPF regulations.
It is advisable to consult with your organization's HR or finance department and also with a legal or financial expert to ensure that you are adhering to EPF regulations and making the necessary adjustments for the software engineer's request appropriately.
I am sorry Deepti, but you are wrong in your post.
The employer is not required to contribute more than 1800 even if the employee wants to contribute more.
They can do so voluntarily, but it is not compulsory.
Please refer to point 16 of the FAQ on PF website
https://www.epfindia.gov.in/site_en/FAQ.php
From India, Mumbai
The employer is not required to contribute more than 1800 even if the employee wants to contribute more.
They can do so voluntarily, but it is not compulsory.
Please refer to point 16 of the FAQ on PF website
https://www.epfindia.gov.in/site_en/FAQ.php
From India, Mumbai
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