Dear Experts,
I have been an EPF registered employer since 2018. The salary of all employees is greater than 20,000, and none of them had UAN before 2018. Our previous consultant had been remitting EPS contributions from 2018 until July 2021. Recently, I discovered a mistake in the EPS contributions. Now, I am unsure whether we should stop EPS for all employees or continue depositing. How can we rectify this old mistake?
Thank you.
From India, Pune
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9I have been an EPF registered employer since 2018. The salary of all employees is greater than 20,000, and none of them had UAN before 2018. Our previous consultant had been remitting EPS contributions from 2018 until July 2021. Recently, I discovered a mistake in the EPS contributions. Now, I am unsure whether we should stop EPS for all employees or continue depositing. How can we rectify this old mistake?
Thank you.
From India, Pune
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First of all, it has to be checked whether the employees were members of EPFO prior to 2018 or not. If they were members of EPS prior to 2018 and the PF gross (Basic & DA) was below ₹15,000 at the time of joining, then it will continue even if the PF gross (at present Basic + DA + Other allowances as per the Apex court verdict) is more than ₹15,000.
If the employee became a member of EPFO for the first time in 2018 (previously not a member of EPFO in any other organizations), then immediately stop the EPS contribution if the PF gross is more than ₹15,000 and deposit the entire amount to the PF only. Take up the matter with the concerned EPFO office with a request letter to transfer the amount already deposited to the EPS account to the PF Account.
From India, New Delhi
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If the employee became a member of EPFO for the first time in 2018 (previously not a member of EPFO in any other organizations), then immediately stop the EPS contribution if the PF gross is more than ₹15,000 and deposit the entire amount to the PF only. Take up the matter with the concerned EPFO office with a request letter to transfer the amount already deposited to the EPS account to the PF Account.
From India, New Delhi
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Dear Sir,
Thank you for your opinion. I am not clear about PF Gross 15000. What is PF gross? Salary of employees more than 20000 but we are doing PF on a maximum of Rs 15000 only. Which salary to consider for EPS applicability.
From India, Pune
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Thank you for your opinion. I am not clear about PF Gross 15000. What is PF gross? Salary of employees more than 20000 but we are doing PF on a maximum of Rs 15000 only. Which salary to consider for EPS applicability.
From India, Pune
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PF Gross means, in general, Basic & DA. However, after the Apex court verdict, it also includes other allowances. In that case, PF Gross will be Basic + DA + Other Allowances (which randomly vary from organizations to organizations). Instead of mentioning different pockets, I refer to it as PF Gross.
S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions +91 98310 81531 [USD HR Solutions – To strive towards excellence with effort and integrity](http://www.usdhrs.in)
From India, New Delhi
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S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions +91 98310 81531 [USD HR Solutions – To strive towards excellence with effort and integrity](http://www.usdhrs.in)
From India, New Delhi
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I understand the situation like this:
You have all employees drawing a salary of more than Rs 15,000. All were covered by EPF by you (or by your consultant), and in respect of all these employees, you have paid Pension also.
Now, since you have once covered the employees under EPF, you cannot stop contributing to PF. I assume that at the time of coverage (i.e., 2018), you should have a salary breakup in which the Basic salaries of all these employees were less than Rs 15,000, and that was why your consultant covered all of them. You would have contributed PF on a maximum salary of Rs 15,000 and not on the total salary. If not, or if you had contributed PF on the actual salary, which is higher than Rs 15,000, and you wish to stop the contribution on that higher salary, you can limit your contribution to 12% of Rs 15,000. But you cannot completely stop contributing to PF.
From India, Kannur
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You have all employees drawing a salary of more than Rs 15,000. All were covered by EPF by you (or by your consultant), and in respect of all these employees, you have paid Pension also.
Now, since you have once covered the employees under EPF, you cannot stop contributing to PF. I assume that at the time of coverage (i.e., 2018), you should have a salary breakup in which the Basic salaries of all these employees were less than Rs 15,000, and that was why your consultant covered all of them. You would have contributed PF on a maximum salary of Rs 15,000 and not on the total salary. If not, or if you had contributed PF on the actual salary, which is higher than Rs 15,000, and you wish to stop the contribution on that higher salary, you can limit your contribution to 12% of Rs 15,000. But you cannot completely stop contributing to PF.
From India, Kannur
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Once started, you cannot withdraw or stop EPF contributions. It is only possible after the employee exits your organization. However, as Mr. Madhu said, you can limit your contributions up to 12% of Rs. 15K to reduce your burden on salary and wages while adhering to all statutory compliances. This is only possible in the case of ESI where the current limit is up to Rs. 21K (Gross Wages). Employees earning more than 21K can be taken out of ESI coverage after the end of the contribution period (1st Apr-30th Sep / 1st Oct-31st Mar).
From India, Lucknow
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From India, Lucknow
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Under the PF and Misc. Act, there are EPF, EPS, and EDLI. Any employee may be a member of EPF but not a member of EPS as per EPFO Circular No- Actuarial/18(2)2008/Vol III/7738 dated 29.08.2014. In that circular at point no. 8, it has been mentioned as follows:
"As EPS will henceforth apply only to EPF members whose pay at the time of becoming PF member is not more than 15,000/- per month on or after 01.09.2014, the entire employer and employee contribution shall remain in the PF, and no diversion to EPS shall be made for all new PF members on or after 01.09.2014 having a salary more than 15,000/- at the time of joining. This must be ensured as any negligence on this issue may lead to unwarranted litigations."
In the instant posting, the employer mistakenly deposited EPS amount violating the above direction of EPFO. To overcome the situation, it is now essential to stop depositing contributions to EPS only and to deposit the entire EPF and EPS contributions to EPF only. It is also essential to forward a letter to the concerned EPFO office stating the mistake and to transfer the deposited EPS amount to the EPF account.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
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"As EPS will henceforth apply only to EPF members whose pay at the time of becoming PF member is not more than 15,000/- per month on or after 01.09.2014, the entire employer and employee contribution shall remain in the PF, and no diversion to EPS shall be made for all new PF members on or after 01.09.2014 having a salary more than 15,000/- at the time of joining. This must be ensured as any negligence on this issue may lead to unwarranted litigations."
In the instant posting, the employer mistakenly deposited EPS amount violating the above direction of EPFO. To overcome the situation, it is now essential to stop depositing contributions to EPS only and to deposit the entire EPF and EPS contributions to EPF only. It is also essential to forward a letter to the concerned EPFO office stating the mistake and to transfer the deposited EPS amount to the EPF account.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
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