Dear All, We are deducting PF contributions as follows:
Employer: 12% on the basic up to the maximum limit of 15000/- = 1800 even though the basic is more than 15000/- . For employees whose basic is less than 15000/- paying 12% on actual basis.
Employee: 12% on actual basic irrespective of any upper cap.
My query, : is there any provision or rule which says that Employee also need to be restricted to 15000/- = 1800/- though the basic is more than 15000/- like employer contribution? Does this come under Voluntary contribution? if so do we needs to take acceptance from the employee for such contribution?
Please clarify.
From India, Hyderabad
3Employer: 12% on the basic up to the maximum limit of 15000/- = 1800 even though the basic is more than 15000/- . For employees whose basic is less than 15000/- paying 12% on actual basis.
Employee: 12% on actual basic irrespective of any upper cap.
My query, : is there any provision or rule which says that Employee also need to be restricted to 15000/- = 1800/- though the basic is more than 15000/- like employer contribution? Does this come under Voluntary contribution? if so do we needs to take acceptance from the employee for such contribution?
Please clarify.
From India, Hyderabad
Dear Krishna,
Statutory contribution towards PF both shares should be equal. Employees' share should be equal to the contribution by the employer. If it is more than the contribution by the employer then excess paid by employee will be considered as VPF.
From India, Mumbai
Statutory contribution towards PF both shares should be equal. Employees' share should be equal to the contribution by the employer. If it is more than the contribution by the employer then excess paid by employee will be considered as VPF.
From India, Mumbai
Hi Krishna,
As you know the contribution of an employer towards the employee’s EPF account is 12% of the salary (basic salary+ dearness allowance+ retaining allowance). The maximum salary limit on which the employer’s contribution is calculated is capped at Rs.15,000.
Similarly, the employee contributes 12% of his salary to the EPF account. However, as per the employee has the choice, voluntarily to contribute for more than Rs.15000 to his EPF account as per his discretion. There is no such prescribed cap on employee’s contribution towards EPF as per the law. The contribution in excess to the mandated 12% goes towards Voluntary Provident Fund (VPF).
VPF contributions also earn tax-free interest income in his EPF a/c.
However, it should be noted that not all of the employer’s contribution goes to the EPF account. Out of the 12% of employer’s contribution, 8.33% goes to the Employees’ Pension Scheme (EPS) and the balance will be credited to the EPF account.
Further, the employer is not obligated to match VPF/ any amount of contribution made by the employee into his PF A/c as it's restricted for the maximum of Rs.15000.
Additionally, the employer also pays 0.5% towards the Employee Deposit Linked Insurance (EDLI), 0.01% as EDLI handling fees and 0.50% or Rs.500 whichever is higher as the EPF administrative charges.
From India, Bangalore
As you know the contribution of an employer towards the employee’s EPF account is 12% of the salary (basic salary+ dearness allowance+ retaining allowance). The maximum salary limit on which the employer’s contribution is calculated is capped at Rs.15,000.
Similarly, the employee contributes 12% of his salary to the EPF account. However, as per the employee has the choice, voluntarily to contribute for more than Rs.15000 to his EPF account as per his discretion. There is no such prescribed cap on employee’s contribution towards EPF as per the law. The contribution in excess to the mandated 12% goes towards Voluntary Provident Fund (VPF).
VPF contributions also earn tax-free interest income in his EPF a/c.
However, it should be noted that not all of the employer’s contribution goes to the EPF account. Out of the 12% of employer’s contribution, 8.33% goes to the Employees’ Pension Scheme (EPS) and the balance will be credited to the EPF account.
Further, the employer is not obligated to match VPF/ any amount of contribution made by the employee into his PF A/c as it's restricted for the maximum of Rs.15000.
Additionally, the employer also pays 0.5% towards the Employee Deposit Linked Insurance (EDLI), 0.01% as EDLI handling fees and 0.50% or Rs.500 whichever is higher as the EPF administrative charges.
From India, Bangalore
Dear Krishna,
Your question as to the need of taking acceptance from the employee for VPF is unanswered by me.
Yes, you need to obtain and submit to EPFO a consent from employee for deducting VPF from his salary.
You may also read below given link to bring more clarity in the subject:
https://www.citehr.com/620180-employ...clare-vpf.html
From India, Mumbai
Your question as to the need of taking acceptance from the employee for VPF is unanswered by me.
Yes, you need to obtain and submit to EPFO a consent from employee for deducting VPF from his salary.
You may also read below given link to bring more clarity in the subject:
https://www.citehr.com/620180-employ...clare-vpf.html
From India, Mumbai
Dear Krishna,
Just the supplement the clarifications given by previous posters , please be informed that the entire basic salary ( i.e 100% of basic salary minus statutory rate of contribution) may be contributed by an employee as Voluntary PF contribution and these contribution too fetch attractive interest as announced by EPFO every year . But such an employee should authorize his employer to do so and such authorization with employers consent should be filed with RPFC
Panchsen
P.Senthilkumar
9884009193
From India, Chennai
Just the supplement the clarifications given by previous posters , please be informed that the entire basic salary ( i.e 100% of basic salary minus statutory rate of contribution) may be contributed by an employee as Voluntary PF contribution and these contribution too fetch attractive interest as announced by EPFO every year . But such an employee should authorize his employer to do so and such authorization with employers consent should be filed with RPFC
Panchsen
P.Senthilkumar
9884009193
From India, Chennai
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Employer-PF-res trict to wages of Rs 6500.pdf
PF contributions[8 7].docx