Hi all,
Can anyone tell me if there are any provisions whereby an employee can contribute only 780 (i.e., if the basic is 6500), even though the basic is more than 6500? Or is it compulsory that he should contribute 12% of his basic + DA?
Cheers,
Divya
From India, Ahmadabad
Can anyone tell me if there are any provisions whereby an employee can contribute only 780 (i.e., if the basic is 6500), even though the basic is more than 6500? Or is it compulsory that he should contribute 12% of his basic + DA?
Cheers,
Divya
From India, Ahmadabad
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As per the latest laws in effect, an employee needs to contribute 12% of his PF Basic as PF contribution. The employer needs to contribute 12% of the PF Basic to the employee's account. The rate is generally published by the government. 12% is mandatory.
Thanks,
Nivya
From India, Madras
Thanks,
Nivya
From India, Madras
Dear Divya,
PF is not calculated with the Gross salary. It is calculated with the Basic component of the salary, i.e., a salary consists of Basic, HRA, other allowances, Conveyance, etc., as components. In this, the Basic alone is taken, and 12% of that is calculated as PF.
In your friend's case, Rs. 12,500 should be his gross salary out of which Rs. 6,500 should be his Basic. From this, 12% would be Rs. 780, which is deducted as Employee PF.
Thanks,
Nivya
From India, Madras
PF is not calculated with the Gross salary. It is calculated with the Basic component of the salary, i.e., a salary consists of Basic, HRA, other allowances, Conveyance, etc., as components. In this, the Basic alone is taken, and 12% of that is calculated as PF.
In your friend's case, Rs. 12,500 should be his gross salary out of which Rs. 6,500 should be his Basic. From this, 12% would be Rs. 780, which is deducted as Employee PF.
Thanks,
Nivya
From India, Madras
Dear Divya,
As per policy, the compulsory contribution is 12% of 6500/-. After that, it's voluntary contribution, so many organizations only deposit the compulsory contribution, i.e., 780/- only. So there is no issue if your friend's PF deduction is only 780/-.
Regards,
Shilpi
From India, New Delhi
5As per policy, the compulsory contribution is 12% of 6500/-. After that, it's voluntary contribution, so many organizations only deposit the compulsory contribution, i.e., 780/- only. So there is no issue if your friend's PF deduction is only 780/-.
Regards,
Shilpi
From India, New Delhi
Hi,
As per the rules, the employee should contribute 12% on the actual Basic + DA drawn, not on 6500. As you asked about 780, i.e., 12% of 6500, this is an option left to the employer; he can or need not, but if he is contributing, he should contribute a minimum of 780, i.e., 12% of B+DA. However, 1.61% administration charges are on the actual basic + DA contributed from the employer.
From India, Bangalore
As per the rules, the employee should contribute 12% on the actual Basic + DA drawn, not on 6500. As you asked about 780, i.e., 12% of 6500, this is an option left to the employer; he can or need not, but if he is contributing, he should contribute a minimum of 780, i.e., 12% of B+DA. However, 1.61% administration charges are on the actual basic + DA contributed from the employer.
From India, Bangalore
Hi,
Thanks, all. My friend's basic + DA is 12500 and not the gross. Everyone has posted different replies. Can anyone please tell me what is as per the law? Is it as per the law that if the employer wishes, he can choose to deduct only the minimum required amount (780) no matter what the actual basic is???
Cheers,
Divya
From India, Ahmadabad
Thanks, all. My friend's basic + DA is 12500 and not the gross. Everyone has posted different replies. Can anyone please tell me what is as per the law? Is it as per the law that if the employer wishes, he can choose to deduct only the minimum required amount (780) no matter what the actual basic is???
Cheers,
Divya
From India, Ahmadabad
Divya, Minimum limit is 780 but its upto the employee if he want to opt for more than 780 (i.e on actuals), that can be done upto any value.
From India, New Delhi
From India, New Delhi
Hi Divya,
The PF Act states that you have to deduct 12% of basic + DA if the same is less than 6500. If it is equal to or more than 6500, we have to deposit 780 as PF.
Furthermore, can anybody advise me on the amount of voluntary contribution that an employee can make to their own PF account? Is there any limit to this?
Regards,
Manjali
From India, Delhi
The PF Act states that you have to deduct 12% of basic + DA if the same is less than 6500. If it is equal to or more than 6500, we have to deposit 780 as PF.
Furthermore, can anybody advise me on the amount of voluntary contribution that an employee can make to their own PF account? Is there any limit to this?
Regards,
Manjali
From India, Delhi
Hi,
This is regarding the renewal of the labor license under the central government act (ours is the Aviation industry). Initially, when we applied for the license, the total number of employees was 65, all of whom were engineers and managers. However, currently, the total number of employees is only 15. The license renewal date is in December. Please advise if we still need to proceed with the renewal of the license?
Regards,
Sivaprasad M
From India, Hyderabad
This is regarding the renewal of the labor license under the central government act (ours is the Aviation industry). Initially, when we applied for the license, the total number of employees was 65, all of whom were engineers and managers. However, currently, the total number of employees is only 15. The license renewal date is in December. Please advise if we still need to proceed with the renewal of the license?
Regards,
Sivaprasad M
From India, Hyderabad
Hi Divya,
The PF contribution is 12% of Basic pay if their basic is less than 6500. If the employees cross 6500 (any increment), the contribution can be limited to 12% of 6500 (whatever the basic pay may be), i.e., 780. But if the employee wishes, he can contribute more.
Hope you got the solution.
Sathish
From India, Mumbai
The PF contribution is 12% of Basic pay if their basic is less than 6500. If the employees cross 6500 (any increment), the contribution can be limited to 12% of 6500 (whatever the basic pay may be), i.e., 780. But if the employee wishes, he can contribute more.
Hope you got the solution.
Sathish
From India, Mumbai
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