Hir Sir, My EPF Wage ceiling rate 15000 in the month of Feb and same in March 2020, and now June 2020 after the increment my wage ceiling rate is 21000 then which wage ceiling rate applicable for epf deduction. Should employer continue to deduct my epf on basis of old ceiling rate i.e. 15000?
With Regards,
Hiren Rohit
From India, Jalalpur
With Regards,
Hiren Rohit
From India, Jalalpur
There is no wage ceiling for contributing to EPF. What the law says is hat for an amount above Rs 15000, contribution of PF is not mandatory. PF being a tax saving investment, employees contribute on higher salary. Though the employers's obligation to pay their share of 12% is on Rs 15000, some employers do contribute on higher salary also. In the CTC system since the employer's contribution is a part of total cost to company, there is hardly any difference to the employer but for an employee it will make a lot of sense because his pension would also be calculated on that higher salary on which the employer contributes to PF/PS (unless the EPFO amends the existing law override the Supreme Court verdict that pension should be based on actual PF qualifying salary and not on Rs 15000)
Now in your case, the employer can decide either way, either to restrict the contribution to 12% of 15000 or contribute PF on actual salary, ie, Rs 21000. Considering that the latter would give you future benefits, as an employee, you should press for contribution on Rs 21000. Of course, the take home salary would come down when your share of contribution becomes Rs 2520(12% of 21000) as against Rs 1800( 12% of Rs 15000)
From India, Kannur
4249Now in your case, the employer can decide either way, either to restrict the contribution to 12% of 15000 or contribute PF on actual salary, ie, Rs 21000. Considering that the latter would give you future benefits, as an employee, you should press for contribution on Rs 21000. Of course, the take home salary would come down when your share of contribution becomes Rs 2520(12% of 21000) as against Rs 1800( 12% of Rs 15000)
From India, Kannur
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Wage-ceiling-ep f-6500-15000-ci rcular-circular .pdf