Dear members,
Is there any rule to determine the minimum basic for PF contribution under the PF Act? What rule specifies this? If an employee has a gross salary of Rs. 15,000 per month, what should be the minimum basic so that the PF authority does not object during inspection?
Regards,
From India, Delhi
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7Is there any rule to determine the minimum basic for PF contribution under the PF Act? What rule specifies this? If an employee has a gross salary of Rs. 15,000 per month, what should be the minimum basic so that the PF authority does not object during inspection?
Regards,
From India, Delhi
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Dear Babanaresh & Ruby,
There is no rule for the breakup of Gross salary under the EPF & MP Act 1952. The breakup of Gross salary will depend on your Company policy. How will your company do the breakup of Gross salary?
As per the breakup of Gross salary, if Basic is up to Rs. 6500/-, then you should deduct PF. If Basic is above Rs. 6500/-, then it will depend upon your Company whether they want to deduct or not. If the company wants to deduct on the full basic, then they can deduct on the full basic, or they can deduct up to Rs. 6500/-.
Hope your doubt should be clear by the above explanation.
Regards, Sunil Sharma
From India, New Delhi
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There is no rule for the breakup of Gross salary under the EPF & MP Act 1952. The breakup of Gross salary will depend on your Company policy. How will your company do the breakup of Gross salary?
As per the breakup of Gross salary, if Basic is up to Rs. 6500/-, then you should deduct PF. If Basic is above Rs. 6500/-, then it will depend upon your Company whether they want to deduct or not. If the company wants to deduct on the full basic, then they can deduct on the full basic, or they can deduct up to Rs. 6500/-.
Hope your doubt should be clear by the above explanation.
Regards, Sunil Sharma
From India, New Delhi
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Hi,
Thank you for the detailed reply. It means to just avoid the PF; we can keep the basic at more than 6500/-. Please correct me if I am wrong, as most companies do not want to pay PF contributions.
Thanks & Best Regards,
Ruby Sharma
From India, Delhi
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Thank you for the detailed reply. It means to just avoid the PF; we can keep the basic at more than 6500/-. Please correct me if I am wrong, as most companies do not want to pay PF contributions.
Thanks & Best Regards,
Ruby Sharma
From India, Delhi
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Hi Ruby, You are correct. If you don’t want to deduct PF then you should keep basic more then Rs. 6500/- to avoid the PF liability from the Employer. Regards Sunil Sharma V3S Group
From India, New Delhi
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From India, New Delhi
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I think even if the basic + VDA crosses Rs6500, we need not cover it under EPF because we are being asked to pay PF on both basic and VDA. So, if both put together cross 6500, I think we may stop covering under EPF.
From India, Vijayawada
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From India, Vijayawada
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Hi all,
Two months ago, I joined an IT company where I was working as an HR and BDE. I cannot say whether I was performing well, but I was making an effort for the company's growth. I faced some issues there as employees would pass comments throughout the working day questioning the role of HR. I addressed one employee who was consistently late by sending him an email. However, my boss did not approve of it, and today, he asked me to leave the company. Furthermore, my boss paid very low salaries to the employees.
I have not received my offer letter or appointment letter yet, and I am confused as to why I was asked to leave the company abruptly. They are citing my performance as the reason for termination, claiming that I am a liability to the company. If that were the case, why were things fine before this incident? Additionally, my boss previously instructed me to manage employee attendance in an Excel sheet, which I did. However, yesterday he mentioned that it should have been kept in a register. Can someone please advise on what may be the issue?
Thank you.
From India, Gurgaon
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Two months ago, I joined an IT company where I was working as an HR and BDE. I cannot say whether I was performing well, but I was making an effort for the company's growth. I faced some issues there as employees would pass comments throughout the working day questioning the role of HR. I addressed one employee who was consistently late by sending him an email. However, my boss did not approve of it, and today, he asked me to leave the company. Furthermore, my boss paid very low salaries to the employees.
I have not received my offer letter or appointment letter yet, and I am confused as to why I was asked to leave the company abruptly. They are citing my performance as the reason for termination, claiming that I am a liability to the company. If that were the case, why were things fine before this incident? Additionally, my boss previously instructed me to manage employee attendance in an Excel sheet, which I did. However, yesterday he mentioned that it should have been kept in a register. Can someone please advise on what may be the issue?
Thank you.
From India, Gurgaon
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Dear Sir,
The basic salary shall be fixed by the company. The P.F. authorities will have nothing to do with it. They won't question anything about the basic salary. They will ensure whether the company is following the Act and Rules or not. The maximum salary for P.F. deduction is Rs. 6,500 as per the Act. However, the management can contribute more if there is any understanding with the union and the management. There is no restriction.
D. Gurumurthy LL. HR & IR Consultant
From India, Hyderabad
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The basic salary shall be fixed by the company. The P.F. authorities will have nothing to do with it. They won't question anything about the basic salary. They will ensure whether the company is following the Act and Rules or not. The maximum salary for P.F. deduction is Rs. 6,500 as per the Act. However, the management can contribute more if there is any understanding with the union and the management. There is no restriction.
D. Gurumurthy LL. HR & IR Consultant
From India, Hyderabad
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No, Ruby,
If anybody is a member of PF, it means if he contributed to PF, you cannot stop his PF even if basic+DA+VDA crosses Rs. 6500. You have to deduct up to Rs. 6500.00; it is mandatory as per the law. In Rajasthan, the minimum PF wage is Rs. 3510.00 as per the latest amendment of the labor department; you may check it out from your labor department if there is any provision of a minimum PF wage.
Sunil
From India, Bangalore
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If anybody is a member of PF, it means if he contributed to PF, you cannot stop his PF even if basic+DA+VDA crosses Rs. 6500. You have to deduct up to Rs. 6500.00; it is mandatory as per the law. In Rajasthan, the minimum PF wage is Rs. 3510.00 as per the latest amendment of the labor department; you may check it out from your labor department if there is any provision of a minimum PF wage.
Sunil
From India, Bangalore
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Sunil, I got confused because yesterday I was discussing with someone, and he told me that if the salary of any employee increases within 1 or 2 years, or maybe in 2 or 3 months, and their basic is more than Rs. 6500/-, then they can stop paying the PF contribution as the PF liability is up to basic + DA Rs. 6500/- (after mutual understanding). We can show their details in resigned employees and then continue their employment record. Can we proceed like that? Please advise.
From India, Delhi
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From India, Delhi
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PF Contribution on not less than Minimum Wage.pdf
Splitting of Minimum Wages for the purpose of PF contribution not permissible.doc x