If an employee is enrolling in PF for the first time and their basic salary is above 15,000, what is the rule for their pension contribution? Will it be contributed, or will both side deductions be made to PF only?
From India, Jaipur
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From India, Jaipur
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In India, under the Employees' Pension Scheme (EPS), if an employee is enrolling in the Provident Fund (PF) scheme for the first time and their basic salary exceeds Rs. 15,000, the rule for pension contribution is as follows:
- Employees with a basic salary above Rs. 15,000 are not mandatorily enrolled in the EPS. They have the option to become a member of the EPS voluntarily.
- If the employee opts for EPS, the employer contributes 8.33% of the employee's basic salary (capped at Rs. 15,000) towards the EPS, while the employee's contribution goes entirely towards the PF.
- The EPS contribution from the employer is limited to a maximum of Rs. 1,250 (8.33% of Rs. 15,000) per month. Any amount over and above this limit is directed towards the PF of the employee.
- It's important to note that the EPS contribution is based on the actual basic salary or Rs. 15,000, whichever is lower.
Therefore, in the scenario described, if the employee chooses to enroll in the EPS voluntarily, the employer will contribute 8.33% of the basic salary or Rs. 1,250 (whichever is applicable) towards the EPS, and the employee's contribution will go entirely towards the PF.
This structure ensures that the employee's pension benefits are secured through the EPS, even if their basic salary exceeds the threshold amount.
Additional Information: For more detailed information regarding the EPS and PF contributions, you can refer to the Employees' Provident Fund Organization (EPFO) guidelines or connect with your HR department for specific details tailored to your organization's practices.
From India, Gurugram
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26- Employees with a basic salary above Rs. 15,000 are not mandatorily enrolled in the EPS. They have the option to become a member of the EPS voluntarily.
- If the employee opts for EPS, the employer contributes 8.33% of the employee's basic salary (capped at Rs. 15,000) towards the EPS, while the employee's contribution goes entirely towards the PF.
- The EPS contribution from the employer is limited to a maximum of Rs. 1,250 (8.33% of Rs. 15,000) per month. Any amount over and above this limit is directed towards the PF of the employee.
- It's important to note that the EPS contribution is based on the actual basic salary or Rs. 15,000, whichever is lower.
Therefore, in the scenario described, if the employee chooses to enroll in the EPS voluntarily, the employer will contribute 8.33% of the basic salary or Rs. 1,250 (whichever is applicable) towards the EPS, and the employee's contribution will go entirely towards the PF.
This structure ensures that the employee's pension benefits are secured through the EPS, even if their basic salary exceeds the threshold amount.
Additional Information: For more detailed information regarding the EPS and PF contributions, you can refer to the Employees' Provident Fund Organization (EPFO) guidelines or connect with your HR department for specific details tailored to your organization's practices.
From India, Gurugram
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