Dear all,
I have come across one query on PF, please help me on this.
1)One employee in my org drawing basic salary 50000/- per month. now he is asking for exempt him from PF deduction. can it be possible? any special rules for exemption?
2) He is saving amount in PPF, so he is asking for exempt him from EPF. Is there any special provisions?
Thanks.
From India, Hyderabad
I have come across one query on PF, please help me on this.
1)One employee in my org drawing basic salary 50000/- per month. now he is asking for exempt him from PF deduction. can it be possible? any special rules for exemption?
2) He is saving amount in PPF, so he is asking for exempt him from EPF. Is there any special provisions?
Thanks.
From India, Hyderabad
EPF Act applies to an organisation where the employee strength, including the contract employees is 20 or above.
As others have mentioned the PF is deducted on the basic + DA (here in after referred as PF Wages). The contribution is 12% by employee (deducted from his/ her salary) and 12% by employer.
Out of the employer contribution 8.33% or Rs. 541/- p.m. which ever is less goes to the pension fund and the rest (3.67%) goes to the employee's provident fund.
Apart from this there are charges and contribution to employee’s deposite link insurance (EDLI) scheme, the total of charges and contribution amounts to 1.61% and are paid by the employer.
The stated limit as per the latest amendment is Rs. 6500/- p.m. (PF Wages). I would like to clarify one thing that even if the PF Wages increased beyond this limit, no employee ceases to be the member of PF. In fact one cannot even withdraw the PF if s/he is moving to a company to which the PF act applies.
An employee is exempt of PF only and only if the organisation is not covered under the PF act or the first PF Wage of the employee is more than Rs. 6500/-.
If once an employee is covered under the act s/he cannot be pushed out of the PF just because her/ his PF Wages has gone beyond the limit as stated by the act.
However, the act does not force the employee and employer to contribute PF over the PF Wages. For e.g. if an employee was drawing 6500/- as PF Wages the total contribution would be Rs. 1665/- (25.61% of the PF Wages i.e. 12% employee contribution, 12% employer contribution and 1.61% towards EDLI and charges).
Now suppose the PF Wages exceeds 6500/- and is 7500/- the organisation may limit the contribution to 1665/- (25.61% of 6500/-) and not 1921/- (25.61% of 7500/-).
Even if the employer wants to contribute to the increased PF Wages, which is 7500/- in this case the contribution to the pension fund will be limited to 541/-.
I hope the underlying cases shall clarify this to you.
(A)Basic 6000/- 6500/- 7500/-
(B)PF Cont (24% of basic 940/- 1019/- 1259/-
Less pension cont)
(C)Pension Cont (8.33% or 541/- 500/- 541/- 541/-
Whichever is less)
(D)Charges 97/- 105/- 121/-
Total PF Cont (A x 25.61%) 1537/- 1665/- 1921/-
or B+C+D
Please feel free to have any further questions on this.
attribution https://www.citehr.com/21732-ceiling...#ixzz2jwAFg7RY
From India, Bangalore
3As others have mentioned the PF is deducted on the basic + DA (here in after referred as PF Wages). The contribution is 12% by employee (deducted from his/ her salary) and 12% by employer.
Out of the employer contribution 8.33% or Rs. 541/- p.m. which ever is less goes to the pension fund and the rest (3.67%) goes to the employee's provident fund.
Apart from this there are charges and contribution to employee’s deposite link insurance (EDLI) scheme, the total of charges and contribution amounts to 1.61% and are paid by the employer.
The stated limit as per the latest amendment is Rs. 6500/- p.m. (PF Wages). I would like to clarify one thing that even if the PF Wages increased beyond this limit, no employee ceases to be the member of PF. In fact one cannot even withdraw the PF if s/he is moving to a company to which the PF act applies.
An employee is exempt of PF only and only if the organisation is not covered under the PF act or the first PF Wage of the employee is more than Rs. 6500/-.
If once an employee is covered under the act s/he cannot be pushed out of the PF just because her/ his PF Wages has gone beyond the limit as stated by the act.
However, the act does not force the employee and employer to contribute PF over the PF Wages. For e.g. if an employee was drawing 6500/- as PF Wages the total contribution would be Rs. 1665/- (25.61% of the PF Wages i.e. 12% employee contribution, 12% employer contribution and 1.61% towards EDLI and charges).
Now suppose the PF Wages exceeds 6500/- and is 7500/- the organisation may limit the contribution to 1665/- (25.61% of 6500/-) and not 1921/- (25.61% of 7500/-).
Even if the employer wants to contribute to the increased PF Wages, which is 7500/- in this case the contribution to the pension fund will be limited to 541/-.
I hope the underlying cases shall clarify this to you.
(A)Basic 6000/- 6500/- 7500/-
(B)PF Cont (24% of basic 940/- 1019/- 1259/-
Less pension cont)
(C)Pension Cont (8.33% or 541/- 500/- 541/- 541/-
Whichever is less)
(D)Charges 97/- 105/- 121/-
Total PF Cont (A x 25.61%) 1537/- 1665/- 1921/-
or B+C+D
Please feel free to have any further questions on this.
attribution https://www.citehr.com/21732-ceiling...#ixzz2jwAFg7RY
From India, Bangalore
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls