What is the income ceiling for mandatory Provident Fund (PF) deductions? I have an employee who is being offered a gross salary of INR 30,000. She does not desire PF deductions and does not possess a Universal Account Number (UAN) from her former employer. Is it mandatory to deduct PF from her salary?
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The Provident Fund (PF) scheme, governed by the Employees' Provident Fund Organisation (EPFO), is a social security initiative by the Government of India to encourage savings among employees.
The PF Act mandates that any employee earning up to INR 15,000 per month must contribute towards the PF. Therefore, if your employee is earning INR 30,000, it is not mandatory for her to contribute to the PF. However, if she chooses to contribute, you as an employer are obligated to match her contribution.
The Universal Account Number (UAN) is a unique 12-digit number assigned to each member of the EPFO, which allows the PF account to be managed more efficiently. If your employee does not have a UAN from her previous employer, she can apply for one through the EPFO's website.
Here's a step-by-step guide on how to handle this situation:
1. Discuss with the employee about the benefits and drawbacks of contributing to the PF.
2. If she decides to contribute, register her with the EPFO and obtain a UAN.
3. Deduct the PF contribution from her salary and deposit it along with your contribution to the EPFO.
4. If she decides not to contribute, ensure that she understands the implications of not having a PF account.
Remember, while it's not mandatory for employees earning more than INR 15,000 to contribute to the PF, it's a good practice to encourage employees to save for their future. Also, ensure that all PF contributions and procedures are in compliance with the EPF Act to avoid any legal complications.
From India, Gurugram
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139The PF Act mandates that any employee earning up to INR 15,000 per month must contribute towards the PF. Therefore, if your employee is earning INR 30,000, it is not mandatory for her to contribute to the PF. However, if she chooses to contribute, you as an employer are obligated to match her contribution.
The Universal Account Number (UAN) is a unique 12-digit number assigned to each member of the EPFO, which allows the PF account to be managed more efficiently. If your employee does not have a UAN from her previous employer, she can apply for one through the EPFO's website.
Here's a step-by-step guide on how to handle this situation:
1. Discuss with the employee about the benefits and drawbacks of contributing to the PF.
2. If she decides to contribute, register her with the EPFO and obtain a UAN.
3. Deduct the PF contribution from her salary and deposit it along with your contribution to the EPFO.
4. If she decides not to contribute, ensure that she understands the implications of not having a PF account.
Remember, while it's not mandatory for employees earning more than INR 15,000 to contribute to the PF, it's a good practice to encourage employees to save for their future. Also, ensure that all PF contributions and procedures are in compliance with the EPF Act to avoid any legal complications.
From India, Gurugram
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HI Pratibha
You just mentioned the Gross wages, but for EPF we need to consider the EPF wages. If the EPF wages is above Rs. 15,000/- and he/she doesn't have UAN number then he/she may be treated as excluded employee, hence EPF contribution is not mandatory
From India, Bangalore
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You just mentioned the Gross wages, but for EPF we need to consider the EPF wages. If the EPF wages is above Rs. 15,000/- and he/she doesn't have UAN number then he/she may be treated as excluded employee, hence EPF contribution is not mandatory
From India, Bangalore
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Hi,
if she is does not have any UAN number (please check on site) & at the time of joining her salary is above 15,000 then she can be considered as "excluded employee". as an employer please get Form 11 signed from the employee for your records.
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if she is does not have any UAN number (please check on site) & at the time of joining her salary is above 15,000 then she can be considered as "excluded employee". as an employer please get Form 11 signed from the employee for your records.
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-Your information is accurate. If an employee's salary exceeds INR 15,000 at the time of joining, they can be considered an "excluded employee" for PF. (1 Acknowledge point)
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Provident Fund - Excluded Employee - Definition.pdf
What is Employee Provident Fund.docx
CiteHR.AI
(Fact Checked)-Your information is correct. If the EPF wages exceed Rs. 15,000, the employee can be considered excluded and EPF contribution isn't mandatory. (1 Acknowledge point)