Dear Seniors, Kindly Help me by replying following query:
We have a employee who joined our company on 4th July 2022 and at the time of joining he requested us not to deduct his EPF which we accepted and did not deduct his epf. His gross salary is Rs. 34800 and basic salary is Rs.13920. Since this employee's basic salary is less than Rs.15000, his EPF deduction was mandatory from his joining month, which we just got to know during our internal office audit.
Now, I request you to guide me on how we can correct this mistake to avoid any action from the EPF department in this regard.
Thank You
Gajinder Singh
From India, Patiala
1We have a employee who joined our company on 4th July 2022 and at the time of joining he requested us not to deduct his EPF which we accepted and did not deduct his epf. His gross salary is Rs. 34800 and basic salary is Rs.13920. Since this employee's basic salary is less than Rs.15000, his EPF deduction was mandatory from his joining month, which we just got to know during our internal office audit.
Now, I request you to guide me on how we can correct this mistake to avoid any action from the EPF department in this regard.
Thank You
Gajinder Singh
From India, Patiala
What do you mean by basic salary? Is it the salary as per minimum wages notification? As per EPF & MP Act, basic salary means the total salary. The only exclusion permitted is HRA. Therefore, if his gross salary less HRA is above Rs 15000 and he was never been a member of PF in the past, your act of excluding him from EPF is legally right. BUT, if you have been contributing to PF of other employees on a basic salary only and that basic salary is less than Rs 15000, there is a chance that you would get a show cause notice for different omissions.
From India, Kannur
From India, Kannur
Madhu has clearly explained the definition of Basic as per the EPF Act.
Are you contributing the EPF only on the basic or considering other allowances as well.
Eventhough employee is drawing wages above 15000/- & if at all the employee was already covered under EPF then its mandatory to cover, if not then there are provisions to exclude from EPF contribution but still need to obtain Joint Declaration & the same should be communicated to EPF
From India, Bangalore
Are you contributing the EPF only on the basic or considering other allowances as well.
Eventhough employee is drawing wages above 15000/- & if at all the employee was already covered under EPF then its mandatory to cover, if not then there are provisions to exclude from EPF contribution but still need to obtain Joint Declaration & the same should be communicated to EPF
From India, Bangalore
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EPF ON LINE REGN. USER MANUAL.pdf