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Chitra Sharma (Executive - HR)     08 April 2008

PF Contribution

i have 1 query regarding PF. what if an employee wants to invest more than 12% of his salary (say around 50-60%) as his PF contribution, can he do that? is it binding that the employer too contributes the equal amount? if not, then can an employees invest more than 12% as his PF contibution.
Please do reply


 14 Replies

RAMRAVINDRAN (co-ordinate)     08 April 2008

Hello C.Sharma, EMPLOYEE CAN PAY HIGHER CONTRIBUTION - Employee has to contribute 12/10% of his 'pay' as contribution. The employee can voluntarily pay higher contribution above the statutory rate. However, employer does not have to match the voluntary contribution, over and above the statutory rate. [para 26(2) of EPF Scheme].

prerna1 (Executive- Personnel ( HR))     08 April 2008

dear chitra,

employee can increase their PF contribution max. one month basic which not includes DA. and employer 's PF contribution is always fixed they can not changeit.
one more knowledgeable thing is PF Office gives the 8.5 % compound interest annually.

Chitra Sharma (Executive - HR)     09 April 2008

Thank u very much

Arihant AC (Legal Advisor)     10 April 2008

hi, my slf Nehal I am working as a A/c. for PF/ESIC & Labour Laws in Embroideriey Co. I want to know that the employer's of our Company is deducting PF on BASIC & DA & ESIC on BASIC D.A & Other Allowance. The gross Salary is Minimum Wage He is Paying Leave Encashment & Bonus on gross Salary whether it is allowed or not ? for Eg. Someone's Gross salary is Rs. 3000/- then is has been shown as 1500/- as Basic + D. A. & other 1500/- as allowance. Please give me advise urgent.

umaselvanathan (HR & Admin - SENIOR EXCECUTIVE)     10 April 2008

Dear Nehal, If an employee is drawing Rs.3000/- as salary break up of salary can be given as 50%to basic and 50 % to other allowances whereas for pf only basic will be taken into account for esi on gross it has to be calculated.br specific in your query for better reply.

sanjay_deys (n/a)     10 April 2008

Dear All, We are working in a company having less than 20 employess. However we may cross 20 in coming months.No body is getting basic salary below 6,500. My question is even if we cross 20 should we have the PF registration ? As per my understanding it's not mmandatory for an employer to pay PF to an employee having Basic Salary above 6500 ( May be 6000 ) . Please send me your valuable opinion. Regards, Sanjay

Chitra Sharma (Executive - HR)     10 April 2008

PF can be deducted on any amount of basic

Arihant AC (Legal Advisor)     11 April 2008

Hi ! I got salary bifercation of 50% +50% the allowances which are shown by our employers are Fixed HR, Transportation, Education (for Married Person who has children), Uniform Washing, F.L.T.A, Canteen, Mobile & Others . In which ESIC is deduct on FHRA, F.L.T.A., In Others Allow Emplyr Paid incentinve & O.T. at interval of 3 months on which P.F. & E.S.I.C. is Deduct. The Uniform is provide by Company & for that not a single charge has been taken from Employees. Please let me know that on which Allowances ESIC is Applicable & on ESIC is not applicable. All the Allowancwes shown here are depending on present of Employyes. As if someone make 1 Absent without any given in written then 1 absent is deduct from Basic as well as in Allowances.

Abhimanyu Soni (n/a)     11 April 2008

yes an employee can contribute any amount as far as his or her contribution is concerned but the employer's liability is restricted upto 12% only.

umaselvanathan (HR & Admin - SENIOR EXCECUTIVE)     12 April 2008

Dear Sanjay, Employer can go for voluntary coverage even if it below 20 employees and slab for pf is 6500/- so employer have to pay his contribution

Guest (n/a)     22 April 2008

Dear all ours is new organisation, for voluntary coverage if theemployee below 10 can be covered or not.

sanjay_deys (n/a)     22 April 2008

Hi Satyanarayana, I think your company can volantary go for PF coverage at any time. For further study you can refer the URL given below. Regards, Sanjay https://www.vpdconsultants.com/prov_info.htm

PBS KUMAR (HR - PROFESSIONAL)     22 April 2008

Dear All,

Ofcourse you are all correct. If the Employee wants to contribute more 12% from his salary the PF authorities will not object. It will be benifit for their Income Tax saving option also. But the Employer may not contribute more that 12%. Also the employer may get option Rs.6500/- is the limit for PF contribution.If he not offered to pay more than that no one will be questioned. And whos salary is crossed more than Rs.6500/- is called 'Exempted Employee' as per the PF Act.


Deepak (Assistant Manager)     24 February 2011

Dear all,

I want to ask if PF inspector has imposed a liability of 3,50,000 for not deducting the PF on minumum wages 6500. Is this liability correct or can we argue on that with PF department as i have heard that PF department can not force us to deduct the PF on 6500.




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