Respected Seniors/Friends,
The Government has approved the increase of PF wage to Rs. 15,000/- per month. Enclosed herewith is the most awaited Notification regarding the same published today itself:
The following may be the impact after the amendment:
1. The employees whose monthly basic wage is Rs. 15,000/- and above, and the companies currently paying PF limited to Rs. 6,500/- for such employees may have to increase the contribution limit to at least Rs. 15,000/-. (As per Section 6 of the PF Act, Equal Contribution to be provided by the employer).
2. The employees who have already opted out from PF coverage (whose basic is above Rs. 6,500) should be covered under the scheme in case their Basic Wages are up to Rs. 15,000/- per month.
3. The companies that are currently extending PF benefits only on Rs. 6,500/- irrespective of their wages may have to increase the PF wages to Rs. 15,000/- and need to pay the employer contribution of 13.61% on Rs. 15,000/-.
4. The pension amount maximum limit may also increase from Rs. 541/- to Rs. 1,000/-.
5. Employees whose current basic wage is less than Rs. 15,000/- may have to pay the contribution based on the actual basic payable.
From India, Jabalpur
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21The Government has approved the increase of PF wage to Rs. 15,000/- per month. Enclosed herewith is the most awaited Notification regarding the same published today itself:
The following may be the impact after the amendment:
1. The employees whose monthly basic wage is Rs. 15,000/- and above, and the companies currently paying PF limited to Rs. 6,500/- for such employees may have to increase the contribution limit to at least Rs. 15,000/-. (As per Section 6 of the PF Act, Equal Contribution to be provided by the employer).
2. The employees who have already opted out from PF coverage (whose basic is above Rs. 6,500) should be covered under the scheme in case their Basic Wages are up to Rs. 15,000/- per month.
3. The companies that are currently extending PF benefits only on Rs. 6,500/- irrespective of their wages may have to increase the PF wages to Rs. 15,000/- and need to pay the employer contribution of 13.61% on Rs. 15,000/-.
4. The pension amount maximum limit may also increase from Rs. 541/- to Rs. 1,000/-.
5. Employees whose current basic wage is less than Rs. 15,000/- may have to pay the contribution based on the actual basic payable.
From India, Jabalpur
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Dear sir,
Please understand this concept similar to the 6500/- limit for EPF deduction and the 15,000/- above salary, where individuals can get an exemption for PF deduction after filling up Form 11 (revised).
Nilesh Bhatt
From India, Vadodara
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Please understand this concept similar to the 6500/- limit for EPF deduction and the 15,000/- above salary, where individuals can get an exemption for PF deduction after filling up Form 11 (revised).
Nilesh Bhatt
From India, Vadodara
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Hi Nilesh, The concept and calculation shall remains same but the ceiling will be increased form Rs. 6500 to Rs.15000 w.e.f 1st September 2014.
From India, Jabalpur
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From India, Jabalpur
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Chaturvedi Sir,
I have a little confusion regarding sr. no. 4 where you mentioned that the maximum limit of the pension amount may increase from Rs.541/- to Rs.1000/-. I believe the calculation process remains the same, where the pension fund must be calculated based on the actual basic wage but not exceeding Rs.15000/-, i.e., a maximum of Rs.1250/-.
For example:
1. Basic Wage 7800
Employee share 936/-
Employer share EPF 286/-
EPS 650/-
2. Basic Wage 15000
Employee share 1800/-
Employer share EPF 550/-
EPS 1250/-
3. Basic Wage 18000
Employee Share 2160/-
Employer Share EPF 9
I believe the notification is referring to the pension amount rather than the pension fund share. Am I correct? If not, could you please explain with an example? I would be grateful for your clarification.
From India, Mumbai
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I have a little confusion regarding sr. no. 4 where you mentioned that the maximum limit of the pension amount may increase from Rs.541/- to Rs.1000/-. I believe the calculation process remains the same, where the pension fund must be calculated based on the actual basic wage but not exceeding Rs.15000/-, i.e., a maximum of Rs.1250/-.
For example:
1. Basic Wage 7800
Employee share 936/-
Employer share EPF 286/-
EPS 650/-
2. Basic Wage 15000
Employee share 1800/-
Employer share EPF 550/-
EPS 1250/-
3. Basic Wage 18000
Employee Share 2160/-
Employer Share EPF 9
I believe the notification is referring to the pension amount rather than the pension fund share. Am I correct? If not, could you please explain with an example? I would be grateful for your clarification.
From India, Mumbai
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Dear Chaturvedi Sir,
I have a little confusion regarding point number 4, where you mentioned that the maximum limit for the pension amount may increase from Rs. 541/- to Rs. 1000/-. I believe the calculation process remains the same, where the pension fund must be calculated based on the actual basic wage but not exceeding Rs. 15000/-, i.e., a maximum of Rs. 1250/-.
For example:
1. Basic Wage: 7800
- Employee share: 936/-
- Employer share EPF: 286/-
- EPS: 650/-
2. Basic Wage: 15000
- Employee share: 1800/-
- Employer share EPF: 550/-
- EPS: 1250/-
3. Basic Wage: 18000
- Employee Share: 2160/-
- Employer Share EPF: 910/-
- Employer Share EPS: 1250/-
The third case depends on the company's policy or the employer's preference regarding whether they want to contribute PF on amounts exceeding Rs. 15000/- or not. I believe the notification is referring to the pension amount and not the pension fund share. Please clarify my doubt and correct me if I am mistaken.
Thank you & Regards,
Shailza
From India, Mumbai
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I have a little confusion regarding point number 4, where you mentioned that the maximum limit for the pension amount may increase from Rs. 541/- to Rs. 1000/-. I believe the calculation process remains the same, where the pension fund must be calculated based on the actual basic wage but not exceeding Rs. 15000/-, i.e., a maximum of Rs. 1250/-.
For example:
1. Basic Wage: 7800
- Employee share: 936/-
- Employer share EPF: 286/-
- EPS: 650/-
2. Basic Wage: 15000
- Employee share: 1800/-
- Employer share EPF: 550/-
- EPS: 1250/-
3. Basic Wage: 18000
- Employee Share: 2160/-
- Employer Share EPF: 910/-
- Employer Share EPS: 1250/-
The third case depends on the company's policy or the employer's preference regarding whether they want to contribute PF on amounts exceeding Rs. 15000/- or not. I believe the notification is referring to the pension amount and not the pension fund share. Please clarify my doubt and correct me if I am mistaken.
Thank you & Regards,
Shailza
From India, Mumbai
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Hi Shailza,
Your understanding regarding pension is absolutely correct. Yes, the notification is about the pension amount, not about the EPS, which is 1250 on 15000/-. It was a typo, and I appreciate your observation of the same.
From India, Jabalpur
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Your understanding regarding pension is absolutely correct. Yes, the notification is about the pension amount, not about the EPS, which is 1250 on 15000/-. It was a typo, and I appreciate your observation of the same.
From India, Jabalpur
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Dear sir,
My organization currently follows a practice of a flat 12% PF deduction from employees. My organization is also compliant with minimum wage guidelines. I would appreciate your guidance to understand the impact and changes that I need to introduce in my organization following this notification.
Best wishes and regards
From India, Kolkata
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My organization currently follows a practice of a flat 12% PF deduction from employees. My organization is also compliant with minimum wage guidelines. I would appreciate your guidance to understand the impact and changes that I need to introduce in my organization following this notification.
Best wishes and regards
From India, Kolkata
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Dear Friends,
The notification has created a challenge for HR professionals. On one side, the employee has to increase their contribution, while on the other side, management also needs to increase its contribution. The take-home salary will decrease, leading to an increase in the HR costs of companies. While the objective of the notification is appreciable, the significant rise from 6500/- to 15000/- has put many companies in a difficult situation amidst this challenging economic scenario.
I would like to request senior members/professionals to suggest how companies can address this challenge in a way that minimizes the impact on both employees and employers.
Regards,
Bhavan
From India, Bangalore
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The notification has created a challenge for HR professionals. On one side, the employee has to increase their contribution, while on the other side, management also needs to increase its contribution. The take-home salary will decrease, leading to an increase in the HR costs of companies. While the objective of the notification is appreciable, the significant rise from 6500/- to 15000/- has put many companies in a difficult situation amidst this challenging economic scenario.
I would like to request senior members/professionals to suggest how companies can address this challenge in a way that minimizes the impact on both employees and employers.
Regards,
Bhavan
From India, Bangalore
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Dear Bhavan,
Just go through the message from Shailza, and you will get clarity. According to the recent PF pension fund notification, everything else will remain the same except for an increase in the contribution to the Provident Fund share. Ultimately, the government requires more funds from this PF pension fund. Employers and employees are not contributing more; rather, employees are diverting their PF savings to the pension fund.
I hope I have understood this correctly.
Regards,
Mathan
From India, Madras
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Just go through the message from Shailza, and you will get clarity. According to the recent PF pension fund notification, everything else will remain the same except for an increase in the contribution to the Provident Fund share. Ultimately, the government requires more funds from this PF pension fund. Employers and employees are not contributing more; rather, employees are diverting their PF savings to the pension fund.
I hope I have understood this correctly.
Regards,
Mathan
From India, Madras
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Minimum Wages Revision - Notification.PD F