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PF – Wage Ceiling Enhancement to Rs 15,000 Effective 01-Sep-2014

The Provident Fund (PF) department, in its circular dated 28-Aug-2014, has notified the wage ceiling enhancement to Rs 15,000 per month from Rs 6,500 per month, effective 01-Sep-2014. Please ensure that PF deduction and contribution are calculated as per the new wage ceiling of Rs 15,000 from Sep 2014 onwards.

In other words,

a. If the PF wage of an employee is more than Rs 15,000 per month:
The minimum mandatory PF contribution (and deduction) shall be Rs 1,800 per month (12% of Rs 15,000).

b. If the PF wage of an employee is less than Rs 15,000 per month:
The minimum mandatory PF contribution (and deduction) shall be 12% of the actual PF wage.

If any of your employees has been out of the PF net so far on account of their having been receiving PF wage of more than Rs 6,500 per month, such employees will now come within the ambit of PF if their PF wage is now is less than or equal to Rs 15,000 per month.

Please note that the new PF wage ceiling could impact the compensation cost incurred by your organization on account of the increase in employer PF contribution. The employees’ take home pay too could get impacted.

You can read about the basis of PF calculations here.

Posted in: Blog

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302 Comments

  1. IKapur October 16, 2014

    What would be the basis of Pf calculation if the salary of an employee is basic 7000, Hra 2100 @30%, conveyance -800. Does the Pf act anywhere says that the Pf has to be deducted on the basis of minimum wages which is 8554 for Delhi.

    reply
    • gautham October 21, 2014

      In your example, the PF amount should be calculated after excluding HRA since HRA is explicitly excluded from the Act. In case the wage drops below the minimum wages, PF should be calculated on minimum wages. There is a PF department circular in this regard.

      reply
      • Ajay Vashist August 19, 2015

        Wat ur mean wage (basic+DA) or Gross. Please explain.
        I paid salary to employees rs.7000/-(basic)+HRA+Conv.+Other allowance. and In delhi i minimum wages is Rs.8650.00. So please tell me on which amt i calculate PF.

        reply
        • gautham August 20, 2015

          PF wage means gross (excluding HRA and other exempted heads) and not just Basic + DA. If the minimum wages amount is more than the PF gross paid, PF should be calculated on minimum wages and not the gross amount.

          reply
      • Chaitali Mukherjee October 14, 2015

        Thanks for the information. Will appreciate if you could share the PF circular regarding PF deduction on the entire salary for the employees getting minimum wage. Otherwise share the link for the same.Thanks in advance.

        reply
        • gautham October 19, 2015

          The circular number is Coord / 4 (6) 2003/ Clarification/ Volume II/ 7394 dated 23/05/2011. However, the PF department later kept this circular in abeyance on account of a High Court verdict. There is now a case pending in the Supreme Court on whether the PF department can insist that the minimum wages should not be split for the purpose of PF calculation.

          We find many PF experts advising that minimum wages not be split for the purpose of PF calculation, to be on the safer side. I think the final word on this will be said when the Supreme Court gives its verdict on this.

          reply
  2. Vishwas October 25, 2014

    Hi I have my basic salary of 9500 an earlier i use to deduct 1140 as a PF and all of the sudden I employer is deducting 1800 as a PF and apart from that employer has deducted some amount from my basic HRS & DA also. so I wanted to know whether they are doing it in the right way or not. & thank for the nice platform for discussion. hope I’ll get the better response.
    Thanks & Regards
    Vishwas

    reply
    • gautham October 26, 2014

      Your employee could be (correctly) calculating PF as 12% of your gross pay (excluding HRA). Your gross pay (excluding HRA) should be Rs 15,000 per month and hence 12% of it works out to Rs 1,800.

      reply
      • Shishir October 6, 2016

        Is it right to calculate pf on gross excluding HRA, if basic is below 15000. Can pf be calculated on conveyance and medical allowance also.

        reply
  3. vipin GUpta November 22, 2014

    Hi I have my basic salary of 10000 an earlier i use to deduct 1200 as a PF and all of the sudden I employer is deducting 1800 as a PF and apart from that employer has deducted some amount from my basic HRS & DA also. so I wanted to know whether they are doing it in the right way or not. & thank for the nice platform for discussion. hope I’ll get the better response.
    Thanks & Regards
    Vipin

    reply
    • gautham November 22, 2014

      PF should be calculated on gross PAY after excluding components like HRA. However, if your gross exceeds Rs 15,000 per month, you can restrict PF to Rs 1800 (which is 12% of Rs 15,000). I presume your current monthly gross excluding HRA is Rs 15,000 (or more). Hence, your organization may be deducting (and contributing) Rs 1,800 as PF.

      reply
      • Rohit January 11, 2017

        Hello

        Can I have this clause of restriction to 1800 in EPF site or anywhere

        reply
        • gautham February 12, 2017

          The law states that contribution of PF up to a monthly salary of Rs 15,000 is mandatory. However, contributions beyond salary of Rs 15,000 can be made though not mandatory. Hence, employers and employees can choose to restrict PF contribution to Rs 1,800 (12% of Rs 15,000) even if the salary is more than Rs 15,000.

          reply
          • Sweety May 11, 2018

            Sir,
            Is employees contribution also restricted to Rs.1800/-??
            Suppose if the Employee Basic+DA is equal to Rs.40000/-
            then how much PF should deduct from the employee.
            Thanks in advance

          • gautham May 17, 2018

            1. The employee’s contribution can be restricted to Rs 1,800 if the employee so wishes.

            2. If the PF wage is Rs 40,000, the PF deduction can be Rs 4,800 (12% of Rs 40,000) or Rs 1,800 (12% of Rs 15,000), if the employee wishes to restrict their PF contribution.

  4. sumit December 8, 2014

    our concern are over basic ,Da,food allowance is more than 20000 as this situation employer contribute as same of employees contribution in 12% please give some suggestion…

    reply
    • gautham December 10, 2014

      I am unable to understand your question. Can you please rephrase it?

      reply
  5. Abhijeet January 5, 2015

    Dear Sir,
    If My Basic is 15000 but i want to deduct PF on only Minimum Wages, can i Do this?

    reply
    • gautham January 9, 2015

      If an employee’s PF salary is equal to or more than Rs 15,000, you cannot deduct PF on any wage less than Rs 15,000.

      reply
  6. deepak January 9, 2015

    Hi my basic salary is 15000 they deduct 1800 for PF.is company providing any contribution in PF

    reply
    • gautham January 9, 2015

      Yes, your company will be making the employer contribution. What is deducted from your salary is the employee contribution.

      reply
  7. Raghavendra January 13, 2015

    is the salary includes Basic+DA or Basic +DA+Special Allowance for PF calulation

    reply
    • gautham January 14, 2015

      Special Allowance and other allowances should be included for the purpose of PF calculation.

      reply
      • Arjun August 21, 2015

        Dear Gautham,

        My Salary Split up is Basic+HRA+Personal Pay+Conveyance Allowance!
        Can you please tell me whether the PF is calculated on BAsic+Personal PAy+ Conveyance or Just Basic??????

        reply
        • gautham August 21, 2015

          PF should be calculated on Basic+Personal Pay+Conveyance and not just on Basic.

          reply
          • Manas February 5, 2018

            Sir, any notification is there for PF should be calculated on Basic+Personal Pay+Conveyance ? and In case the wage drops below the minimum wages, PF should be calculated on minimum wages ?

          • gautham February 13, 2018

            Sir, any notification is there for PF should be calculated on Basic+Personal Pay+Conveyance ?

            Ans: https://www.hinote.in/calculate-pf-on-gross-pay-and-not-basic-head-of-pay-part-i

            In case the wage drops below the minimum wages, PF should be calculated on minimum wages ?

            Ans: There was a circular from the PF department that PF should be calculated at least on minimum wages. However, the circular is not currently in effect on account of a court case regarding splitting of wages for the purpose of PF calculation.

  8. Darshana January 28, 2015

    my salary is 12000 . so please tell me basic salary and hra how i calculated /

    reply
    • gautham January 29, 2015

      The breakup of salary across different heads of pay shall be as per your organization’s policy. In most organizations, Basic is kept at 40% to 60% of the total salary.

      reply
  9. amit March 2, 2015

    if my basic salary is 15000/- how much pf should be deducted

    reply
    • gautham March 19, 2015

      If your Basic salary is Rs 15,000 per month, the PF deduction shall be at least Rs 1,800 per month. It can be more than Rs 1,800 if the employee and the employer so wish.

      reply
  10. Mohan Singh March 7, 2015

    Hi, my salary is 16000.00 pm. i joined company after 1 sep. 2014. my company told me that you are not eligible for EPF because your salary is more than 15000.00. please suggest me is it right or wrong.

    reply
  11. Prathyusha March 17, 2015

    Hi,

    My yearly CTC was 2.4. And as per the new PF norms how much would I get as take home? Both employee (Rs.1800) and employer (Rs.1800) contributions were being deducted from my salary. Is it true that the new PF rule contained that both the employee and employer should be deducted from our salary? Kindly clarify.

    Regards,

    reply
    • gautham March 19, 2015

      If your CTC is Rs 2.4 lakh and the total PF salary is Rs 2.4 lakh (Rs 20,000 per month), the PF deduction shall be at least Rs 1,800 per month. It can be more than Rs 1,800 if the employee and the employer so wish.

      Employer contribution to PF is not a deduction from the employees’ salary. The employer contribution is a head of pay in addition to heads such Basic and HRA.

      reply
  12. rahul March 26, 2015

    My salary is 15000rs take home…but I am not eligible for any pf…why??

    reply
    • gautham March 27, 2015

      If your organization is registered with the PF department and if you have not opted out of PF, you are absolutely eligible for PF.

      reply
      • KHUSHALI DODIYA April 3, 2018

        SIR,
        MY PREVIOUS EMPLOYMENT MY SALARY WAS 1ST 10000/- THAN MY PF WAS DEDUCTED 1200 AFTER THAT SALARY INCREASED TO 16000 ALSO PF WAS DEDUCTED FROM SALARY AFTER THAT I CHANGED MY JOB SALARY STARTING RS.15200/- AND THEY NOT DEDUCTED MY PF I TOLD THEM TO DEDUCT MY PF THEY TOLD THAT IT IS NOT COMPULSORY FOR US TO DEDUCT PF WHOSE SALARY ABOVE 15000/-

        reply
        • gautham April 9, 2018

          This is wrong. Your new employer should deduct PF from your salary and you should transfer your PF balance from your previous employer to your new employer.

          reply
  13. satyander bhardwaj April 12, 2015

    Sir
    i am working in registerd company and my salary is 17000.my company not giving me epf.when i told them for pf.they said it is not liable for more then 15000.is this right.what i do for getting pf.please help me

    reply
    • gautham April 21, 2015

      No, it is not correct. If your PF salary is above Rs 15,000 you can be exempt from PF only under certain circumstances.

      reply
      • Vishal July 27, 2016

        Can you please let me what are those circumstances in which you will be exempted from PF deduction. Is it so mandatory to deduct PF if the PF wages exceeds 15k limit

        reply
        • gautham July 28, 2016

          An employee cannot be exempted from PF just because his PF wage exceeds Rs 15,000. Once an employee is into PF in an organization, he cannot be left out of PF until the end of his employment with the organization.

          reply
  14. Anil Kumar Sharma April 14, 2015

    my salary is 19000 p.m. included all please calculate pf

    reply
    • gautham April 21, 2015

      Without the break-up, it will not be possible to arrive at PF.

      reply
  15. SSV April 14, 2015

    Hi,

    My gross is 1.9 lacs per month. Basic Salary is around 35k p.m. But my company wants to deduct only 1800 pm towards pf and they are also doing matching contribution. Is this legal? Is it not mandatory to deduct 12% of the basic salary?

    Please advise. Thank you.

    reply
    • gautham April 21, 2015

      As per the law governing PF, it is mandatory to deduct PF to the extent 12% of the salary as long as the salary is less than or equal to Rs 15,000 per month. Once the salary goes above Rs 15,000, you have the option of contributing PF to the extent of 12% of the actual salary received or restricting PF to 12% of Rs 15,000.

      Hence, what your organization is doing is in line with the law.

      reply
  16. Dheeraj Bhai Audichya April 15, 2015

    Dear Sir,
    Please clarify the following-
    1. if at the joining someone’s basic+DA is more than 15000/-, whether he will covered under PF in case if –
    1. he was not the member of PF.
    2. he was member of PF.
    2. Whether he can become the member of PF by paying only his share of Rs. 1800/- when no employer share is paid.
    3. if someones Salary crosses the limit of PF due to increment, whether employer and employee share will be continued as usual or employer can stop his share.

    Regards

    Dheeraj Bhai

    reply
  17. Nisha April 22, 2015

    Hi,
    When we say PF wage , I hope we are talking about Basic+DA. But in some private companies they are not giving DA. So shall we calculate it on the basis of Basic Salary only or considering the lumpsum amount being paid? e.g, if an employee is having basic as 8,000 and total as 20,000, which will we consider and why?

    Regards,
    Nisha

    reply
  18. m.v.subramaniyan May 6, 2015

    my doubt is whether the salary limit shall be restricted to Rs 15000 pm if exceeds so for 12% epf contribution .Whether the employer is liable to contribute over and above the 15000 limit

    reply
    • gautham May 6, 2015

      The employer can choose to restrict PF wage to Rs 15,000 if the organization so wishes. This even if the wage paid to employee goes above Rs 15,000 per month.

      reply
  19. varun kumar May 6, 2015

    my ctc salary is 19000 . so i am eligible for pf or not.

    reply
  20. Babu May 8, 2015

    Hi my basic is 20k, what should my contribution in maximum? Is it 1800/- or 2400/-

    reply
    • gautham May 8, 2015

      The minimum is Rs 1,800. You can choose to contribute more if you wish.

      reply
  21. Thangapalani May 8, 2015

    I need clarification Basic salary and Da for the year 2015-16-is how much for Tamilnadu

    reply
    • gautham May 9, 2015

      Are you referring to minimum wages?

      reply
  22. Keshari May 11, 2015

    My Basic Salary is 9000/- P.M.
    please tell me the EPF amount to contribute and what is the Minimum basic salary to EPF Contribution.

    reply
    • gautham May 12, 2015

      The minimum PF salary shall be Rs 15,000 or the actual salary paid, whichever is lesser. Please note that PF should not be calculated on any amount less than the minimum wages as specified by government authorities.

      reply
  23. Keshari May 11, 2015

    i get 13000/- P.M as Salary in a private company. now company wanted to start E PF benefits for employees on Minimum Basic Salary for E PF. what should be minimum Basic Salary.

    reply
    • gautham May 12, 2015

      The minimum PF salary shall be Rs 15,000 or the actual salary paid, whichever is lesser. Please note that PF should not be calculated on any amount less than the minimum wages as specified by government authorities.

      reply
  24. PADMA .K. NAIDU May 20, 2015

    My salary is Rs. 40,000/- pf deducted Rs. 4,800/- is it correct. Please advice which is correct.

    reply
    • gautham May 26, 2015

      You employer seems to be deducting PF at 12% of the salary. This is a correct practice.

      reply
  25. Gulshan June 5, 2015

    My salary… Basic + DA plus HRA is 12000. How much would be my PF?
    Should it be 1800 or !2% of 12000?

    Also is it compulsory to deduct my contribution?

    reply
    • gautham June 6, 2015

      1. The PF deduction should be (Basic + DA) x 12%.

      2. Yes, PF deduction is compulsory if your organization is enrolled with the PF department.

      reply
  26. Praveen June 6, 2015

    Hi

    Do we need to include HRA, Conveyance for PF deduction apart form Basic and DA???
    I went through an article published on 2011… please refer the link and advise..

    http://archive.indianexpress.com/news/include-hra-conveyance-to-fix-pf-hc/819315/

    Thanks
    Praveen

    reply
  27. Ashish Dadia June 14, 2015

    Hi. Have seen all the conversations related to PF. From the conversation, I have understood the following:

    1. PF is calculated on Basic salary and not any other component.
    2. If Basic salary crosses 15000 p.m. the person is eligible for PF.
    3. The mandatory PF deduction is 1800 per month, if the Basic salary is 15000, 25000 or 50000 per month. If the employer wishes to have a higher PF contribution, he can do so, but the employer can restrict PF contribution to 1800 per month for all as well, irrespective of the Basic salary amount.

    Please confirm if my understanding is correct.

    reply
    • gautham June 15, 2015

      1. PF is calculated on Basic salary and not any other component.

      Ans: This is incorrect. PF is to be calculated on gross and not Basic pay. Please take a look at our blog post on this.
      https://www.hinote.in/calculate-pf-on-gross-pay-and-not-basic-head-of-pay-part-i

      2. If Basic salary crosses 15000 p.m. the person is eligible for PF.

      Ans: No, this is wrong. An employee is eligible for PF whether he receives a salary which is lesser than or greater than Rs 15,000 per month.

      3. The mandatory PF deduction is 1800 per month, if the Basic salary is 15000, 25000 or 50000 per month. If the employer wishes to have a higher PF contribution, he can do so, but the employer can restrict PF contribution to 1800 per month for all as well, irrespective of the Basic salary amount.

      Ans: The mandatory PF deduction is Rs 1,800 or 12% of salary, whichever is lesser. Beyond a salary of Rs 15,000, both employer and the employee can choose to restrict PF contribution.

      reply
  28. RANJITH June 18, 2015

    My salary is Rs. 14,000/- pf deducted Rs. 1008 /- is it correct. Please advice which is correct

    reply
    • gautham June 28, 2015

      We can answer this question if we get to know the salary break-up.

      reply
  29. arvind July 1, 2015

    My Gross Salary is Rs.21000/- which Includes Basic + D.A. Rs.12,194/- and Conveyance Allowance is Rs.1,626/-, H.R.A. is Rs. 4065/-. How much PF would be deducted and on which amount?.

    reply
    • gautham July 6, 2015

      The PF deduction shall be 12% of gross pay excluding HRA. However, if the PF amount goes above Rs 1,800, you can choose to restrict to Rs 1,800.

      reply
      • Arunraj December 19, 2018

        Gross salary 25050, My PF deduction is restricted to 1800…. I want to remove the Restriction of 1800.. I need to set my pf deduction 12% of my gross pay 25050 is 3006… How to change that, kindly help me

        reply
        • gautham December 27, 2018

          You can ask your employer to deduct a higher PF amount from your salary.

          reply
  30. Prasanta Kumar Nayak July 3, 2015

    Sir,

    I was working in three companies in different period where my PF was deducted. I did not withdraw the amount. After leaving the third company i worked in a company where PF is not applicable. Now since last three months I am working in a private limited company where pf rule is applicable and my pf deduction are made. Since my PF account was non- operative for more than 6 years .

    My question is can I accumulate all my PF account to the new account. Kindly note that my PF deduction was made from the year 2000 to 2008.

    reply
    • gautham July 6, 2015

      Yes, you can. Please check with your previous employers for enabling transfer of PF amount to your current PF account.

      reply
  31. Jimmy July 8, 2015

    Hello

    I have two doubts please help me out

    1. My company is having 30 employees and everyone have their basic salary 17,500 or more + Medical and Convince allounce they are not deducting PF and took a signatour on “PF deduction not required form” if that athical ?
    2. They are not providing HRA as a break up in our salary slip is that athical ?

    reply
    • gautham July 9, 2015

      1. While employees who receive monthly PF salary of over Rs 15,000 can opt out of PF, there are conditions to comply with in order to opt out. If your organization complies with all the conditions, employees can opt out of PF.

      2. Not sure why HRA is not being displayed on payslip. You can check with your HR department in this regard.

      reply
  32. Anil Kumar July 20, 2015

    I am working in a pf paying company. Kindly inform me what are the allownances which are excluded from calculating PF?. Is HRA is arriving on Basic Salary or Gross salary?

    With regards
    Anil

    reply
  33. rajesh July 20, 2015

    Dear Sir now from my salary 2000+2000/- rupees deducted.

    my basic salary is 20000/-

    Can i deduct more towards EPF deposit every month for saving.

    please replay me ASAP

    mob-09438761987

    reply
    • gautham July 21, 2015

      An employee can contribute more than 12% of PF wages as his PF contribution, if he so wishes. The total employee contribution can go up to 100% of the PF wages. But please note that the employer is not obliged to match employee’s contribution beyond the mandatory contribution.

      reply
  34. rajesh July 20, 2015

    Above value is approx…..

    reply
  35. rajesh July 21, 2015

    CAN I DEDUCT 2500.00 + 2500.00 TOWARDS epf EVERY MONTH

    BCZ I AM A CTC BASED employee
    SO HERE TOTAL 24 % DEDUCT FROM MY ctc.

    PLZ CLEAR MY DOUBT THAT CAN I DEDUCT MORE THAN 24 %

    AFTER YOUR ANSWER I WILL DISCUSS WITH MY HR…

    IF IT IS A LIGAL PROCEDURE…

    reply
  36. swarn sing August 4, 2015

    What would be the basis of Pf calculation if the salary of an employee is basic 7000, Hra 2100 @30%, conveyance -800. Does the Pf act anywhere says that the Pf has to be deducted on the basis of minimum wages which is 8554 for Delhi

    reply
    • gautham August 5, 2015

      Yes, PF has to be deducted on minimum wages if the actual wage paid to an employee is less than the minimum wages. There is a PF department circular (dated 23-May-2011) to this effect.

      reply
  37. Deeksha Tiwari August 18, 2015

    Sir,

    i joined new company .before we join we discuss about the salary which is decide that salary is 14000/m in hand and i signed the 1 year bond paper due to 14000/m in hand salary but after 1 week they said your pf will be deduct as 3600 of my current ctc means they will give me 10000/m some thing salary .i joined this company as a 11 month experienced not fresher they give me three choice one is if i dont want to cut pf then i change my designation second is resign other wise i cut the pf as they say .what should i do? please reply in my mail urgent.

    reply
    • gautham August 18, 2015

      If there is an agreement which clearly states that you will receive Rs 14,000 per month on hand (net pay), you could take it up with the company and ask why they are not honouring the agreement. If you do not receive a satisfactory answer, you have 2 options – either approach the relevant authorities with a complaint or leave the organization.

      reply
  38. Rohit August 24, 2015

    Sir,
    My gross salary is 20,000 Pm. Which would be my P.F deduction 1800, 1560 or 1680 Is it Basic+DA+CA or Basic+DA.

    reply
    • gautham August 26, 2015

      If the salary structure contains Basic, DA and CA, the PF contribution shall be calculated as 12% of Basic+DA+CA. However, you can choose to restrict PF contribution to Rs 1,800 per month in case 12% of Basic+DA+CA is greater than Rs 1,800.

      reply
  39. Sachin September 4, 2015

    Sir, I hava a dout that at the time of joining my salary structure given by company basic plus da totaling to Rs 15,500 but due to absentisum my salary come in the hand at the end of month Rs 13200 only . is PF , ESIC, applicable to that emplee, or he come under exempted employee definition?

    reply
    • gautham September 7, 2015

      ESI – Given that the fixed salary is above Rs 15,000 per month, the employee shall fall in the exempted category.

      PF – If the employee has opted out of PF, he shall not get into the PF net just because his salary falls below Rs 15,000 due to loss of pay.

      reply
  40. Nitesh Agarwal September 7, 2015

    Sir,
    My Basic salary is less than Rs. 15K and my comapny deducting Rs. 1800 as PF.

    I want to know that for employees having basic less than Rs. 15K, what should be the PF deduction. Is it 12% of 15000 or 12% of Actual basic salary????

    reply
    • gautham September 7, 2015

      PF should be calculated as 12% of gross pay (excluding certain heads). We cannot answer this question unless we get to know your gross pay (amount and break-up).

      reply
  41. Melwin September 16, 2015

    Sir,
    My Salary is Rs. 17,000/- in hand. If I deduct 12 % of PF i.e,, (Rs. 2,040/-), will I get the money double or only Rs. 2,040/- will be my savings as PF.

    When my salary was Rs. 12,000/- my PF was deduction 12 % i.e, (Rs.1,440/-); I got my PF double which was deducted from my salary. Instead of Rs. 1,440/- I received Rs. 2,880/-.

    Kindly confirm, that same will be applied for Rs. 17,000/- or not.

    reply
    • gautham September 16, 2015

      Your employer should be depositing both employer and employee PF contributions to the PF department. Hence, if Rs 2,040 is the contribution by the employer and Rs 2,040 is the deduction, a total of Rs 4,080 shall be deposited with the PF department along with adminsitration charges etc.

      reply
  42. Suresh September 20, 2015

    Should i exempt to employees from PF whose gross salary 15000 and above? that means in salary breakup should i calculate the 15000 put as basic+da?

    reply
    • gautham September 22, 2015

      If the gross salary (Basic, DA and other components except HRA) is more than Rs 15,000 per month, the employee can be exempted subject to certain conditions. Please note that an employee who is currently under PF cannot get out of PF when the salary goes above Rs 15,000.

      reply
  43. Yash Mehta September 24, 2015

    From all the post i m still unable to understand 2 ques.

    1) If my salary(basic+DA) is less than 15,000 than PF will be compulsoryly deduct right?

    2) If my salary (Basic+DA) is more than 15,000 than it is not mandatory to deduct at all.

    Correct me if i m wrong. TIA

    reply
    • gautham September 25, 2015

      1) If my salary(basic+DA) is less than 15,000 than PF will be compulsoryly deduct right?

      Ans: Yes, but salary is not just Basic+DA. It includes other heads of pay except heads such as HRA which are left out by law.

      2) If my salary (Basic+DA) is more than 15,000 than it is not mandatory to deduct at all.

      Ans: If you have been a PF contributor, the deduction cannot be stopped when your salary goes above Rs 15,000 per month. You still have to contribute a minimum PF calculated as 12% of Rs 15,000.

      reply
  44. HARISH MIRANI October 7, 2015

    If we appoint the person on total salary more than 15000/- PM ( Up to Rs 100,000/- ) their is completion to deduct the PF @ 12% (on BASIC + DA )

    reply
    • gautham October 7, 2015

      If the PF salary is more than Rs 15,000 the PF should still be deducted (unless the employee can be exempted) at 12% of PF salary. However, you can restrict PF to Rs 1,800 (12% of Rs 15,000) per month if you wish.

      reply
  45. Rajesh Kumar October 15, 2015

    Sir,
    I am working in a pvt company in Varanasi since last 2 years.I’m getting 14000 pm,nothing else.If I want to quit the job what amount should I get ?

    reply
    • gautham October 19, 2015

      If you have only statutory deductions, your net pay shall be your gross pay minus ESI (if any) minus Professional Tax (if any).

      reply
  46. sachin October 19, 2015

    my salary is 19000 basic, my job in pvt ltd company. so company is liable to deducted pf on my salary mandatory or not. explain me that pf deducted on 19000 basic salary for employer is mandatory.

    reply
    • gautham October 23, 2015

      It is mandatory. However, PF can be restricted to 12% of Rs 15,000 if you wish.

      reply
  47. A.BALASUBRAMANIAN October 26, 2015

    Dear

    If any rule Monthly salary Is Rs 15000 take home salary
    So there is no PF deduction Kindly confirm this
    Thanks
    BALAA

    reply
    • gautham November 5, 2015

      There is no such blanket rule.

      reply
  48. b n venkataramu November 4, 2015

    if an employee drawing more than 15000/- salary per month
    whether he should covered/enrolled under epf is it mandatory or optional

    reply
    • gautham November 5, 2015

      If your organization is covered under PF, you cannot be exempted from PF when your salary goes above Rs 15,000 per month.

      reply
  49. R S Pandi November 4, 2015

    Dear sir,

    Sir i am getting salary Rs.40,000/- pm, i want know , how much should i deduct the PF on my salary.

    I need your help.

    reply
    • gautham November 5, 2015

      We can answer this question only if we get to know the breakup of your gross pay.

      reply
  50. Amit November 6, 2015

    employer share is also deducted from my salary after an increment and they are not showing it in salary sleep. so my salary sleep shows less total amount (i.e. equal to employer share) . previously it was not like that.
    is it legal to do so?

    reply
    • gautham November 12, 2015

      Employer PF contribution is typically not displayed on the payslip.

      reply
      • Amit November 17, 2015

        bt as per appraisal letter my total salary is 21000, in salary slip total earnings shows are 19200.

        reply
        • gautham November 19, 2015

          Kindly check with your HR team on whether there are any pay components which are not displayed on payslip.

          reply
  51. Mahabaleswara M G December 7, 2015

    Sir, One of our Driver salary is Rs.16300.00PM, which includes all items..like Basic, DA, Service tax, etc., Please advise me, whether his PF & ESI contribution should be calculated for Rs.15,000.00 ONLY or Rs. 1630.00 ( i.e., above Rs.15,000.00) Or. Rs. 16,300.00. Also, tell me how much would be the PF & ESI deduction?

    reply
    • gautham December 17, 2015

      We need to check each head of pay with regard to its PF and ESI applicability in order to answer this question.

      If the PF salary is RS 16,300, you can calculate PF as 12% of Rs 16,300 or 12% of Rs 15,000, if you so wish.

      reply
  52. w construction co. December 25, 2015

    dear sir,

    my qution is–saoce sir my 1 employee is salary 15500/month…but this is employee are not coming full month.the after deduction is month payment are not above of 15000/-.so plz ans me he is come of pf catagory or no.for exampl–the employee wages is 15500/month..but nov slary is 14500.so so he employee under of epf act or no..plz help me

    reply
    • gautham December 29, 2015

      If an employee is out of PF, there will be no PF deduction for him just because his salary went below Rs 15,000 in a month on account of loss of pay etc.

      reply
  53. SHYAM RAMVILAS SABU February 1, 2016

    DEAR SIR,

    NAMASKAR,

    MY QUESTION IS, IF EMPLOYER PAY TO TRAINEE STAFF RS.10000/- AS A PAYMENT. IN RS.10000/- ( RS.3000 AS BASIC, RS.3000/- AS TRAVELING ALLOWANCE, RS.4000/- AS PERFORMANCE ALLOWANCE AND RS.2000/- AS COMPUTER ALLOWANCE )

    SO PLEASE GUIDE US ON WHICH AMOUNT EMPLOYER DEDUCT PF AND WHAT IS THE %

    PLEASE REPLY SIR

    YRS
    SHYAM
    8275925336

    reply
    • gautham February 1, 2016

      PF should be calculated on the total of all heads of pay at 12%.

      reply
  54. Rajan February 4, 2016

    can PF be deducted less than the MW

    reply
    • gautham February 5, 2016

      The PF department, a few years ago, issued a circular that wage for the purpose of PF calculation cannot be less than the minimum wage. However, this was stayed by a High Court and the matter is now pending in the Supreme Court. Hence, until the Supreme Court decides on this matter, one can assume that PF wage can be less than the minimum wage.

      reply
      • Jadhav March 26, 2018

        Please highlight on the status of the circular from PF department , about “wage for the purpose of PF calculation cannot be less than the minimum wage “.

        Whats the minimum wage for the PF eligibility , and the minimum PF contribution (employee + employer ) that is needed to keep the PF account active to continue earning the interest .

        reply
        • gautham April 2, 2018

          The department has withdrawn the circular on calculating PF on minimum wages since the matter is pending in a court of law. There is no minimum PF eligibility per se.

          reply
  55. Rajan February 4, 2016

    if a person is working for more for 28 days in a month, then PF contribution by the employer will be calculated on total earning of 28 days on or MW for 26 days. Please explain

    reply
    • gautham February 5, 2016

      It should be 12% of total PF wage.

      reply
  56. Raj R February 5, 2016

    Hallo sir,

    My current salary is 15000/- and now its time for a hike. My company organization is saying PF will be deducted for employees under salary 20000/-.
    Is that right?
    Is it necessary to deduct PF from the salary for more than 15000/-??
    Can we have the rights/privilege to remove PF for more than 15000???

    Please sir.
    Regards

    reply
    • gautham February 9, 2016

      Not sure on what basis your company is saying that PF will be deducted only for employees with salary under Rs 20,000.

      If you are already under PF, you cannot get out of PF just when your salary increases above Rs 15,000.

      reply
  57. Shiju February 11, 2016

    Hi,

    Does this mandatory that every company should be registered with PF department?

    reply
    • gautham February 12, 2016

      For a typical company, PF registration is mandatory if the employee strength is 20 or more. Please see the PF coverage rules for more information.

      reply
  58. jyoti rawat February 13, 2016

    can we take 40% as a basic + da for pf deduction?
    Does it matter in legal policy in pf

    reply
    • gautham February 16, 2016

      PF should be calculated on gross pay excluding exempted heads such as HRA. If 40% of Basic + DA is greater than 12% of PF gross, you can calculate PF deduction as 40% of Basic + DA.

      reply
  59. Vipin February 17, 2016

    If basic of Employee is Rs.23000 but due to loss of pay his payable days is 8 only and earned basic of 8 days is 6000. then on what amount pf will be calculated.
    1. 15000*12%= 1800*8/30= 480
    or
    2. 6000*12%= 720.

    Kindly suggest the pf amount payable.

    reply
    • gautham February 17, 2016

      PF is calculated on earned gross (not just Basic) after excluding exempted heads such as HRA. Please calculate the earned gross after applying loss of pay and calculate PF as 12% of the earned gross. If the earned gross (after loss of pay) is greater than Rs 15,000, you can choose to restrict PF contribution to 12% of Rs 15,000.

      reply
  60. Monika February 18, 2016

    hi sir
    if my salary is 4400 what will be the contribution of my and my employer toward PF .is ther any scheme of pension. plz tell me the calculation step by step

    reply
    • gautham February 26, 2016

      The employee and employer contribution shall be 12% (each) of your salary.

      reply
  61. Dev April 2, 2016

    Could u pl advise as per the below salary breakup

    COMPONENTS : CTC EARNINGS DEDUCTIONS AMOUNT
    BASIC : 23800 23800 PROVIDENT FUND : 1,800.00
    HRA : 9240 9240 ESIC : –
    CONVEYANCE : 1600 1600 HEALTH INSURANCE : –
    OTHER ALLOWENCE : 12106 12106 ADVANCE : –
    MEDICAL ALLOWENCE : 1250 1250 LOAN : –
    EMPLOYER PF : 2004 PROFESSIONAL TAX : 2 00.00
    EMPLOYER ESI : — INCOME TAX : –
    MOBILE ALLOWENCE : – ADVANCE EXPENSES : –
    EXCESS TELEPHONE : –
    OTHER DEDUCTIONS

    Please how much amount PF amount i will get.

    reply
    • gautham April 5, 2016

      We are unable to understand your question. Can you please rephrase it?

      reply
  62. DevC April 12, 2016

    Dear Sir,

    I joined a company at a take-home salary of 15000 (minus P.Tax) in September 2007.

    When the amendment came in 2014, I was earning around 26750 (minus P.Tax).

    My company is listed with PF.

    1. Are they right to tell me that you do not fall under the PF limits?
    2. Opting out is a verbal communiction or written?

    reply
    • gautham April 12, 2016

      Once you become a PF member, you cannot opt out just because your PF salary goes above Rs 15,000. You have to continue to be a PF member until the end of your stint with the company.

      reply
      • DevC April 12, 2016

        Thank you for your reply. But I dont think I made myself clear, there.

        I was not under PF. Inspite of my company being listed under PF . Therein lies my question. Did they do the right thing with me? Did they have the right to not get my PF rolling? Wouldnt this have required my consent?

        reply
        • gautham April 13, 2016

          When a person joins an organization which is under PF, he can opt out of PF if:

          a. He is not currently a member of PF (in other words, he was not a PF member in his earlier organization or he has withdrawn his PF account prior to joining the new organization).

          and

          b. His PF salary per month is more than Rs 15,000.

          Please note that both the above conditions should be satisfied if the new joinee wishes to opt out of PF.

          Whenever a person joins an organization (which is under PF) he should submit what is called Form 11 to the organization. This is the form in which he specifies his current PF status and communicates whether he wants to opt out of PF. In other words, your consent to joining or not joining PF cannot be verbal and has to be through Form 11.

          reply
  63. Shiv April 12, 2016

    If an employee gets lesser then 15k (Basic+DA), then what should PF contribution amount? If the contribution is 1800, does it mean that irrespective of the salary the contribution cannot be lesser than 1800 per month?

    Please advise, thanks.

    reply
    • gautham April 12, 2016

      If the PF salary is lesser than Rs 15,000, the mandatory PF shall be 12% of the actual salary and not Rs 1,800. For example, if the salary is Rs 10,000, the PF contribution shall be Rs 1,200 (12% of Rs 10,000) and not Rs 1,800.

      reply
  64. usha April 26, 2016

    Hi,
    As per revised wage act, minimum wages for skilled labour is Rs,8754/-( basic +DA) and HRA 5% of Basic salary = Rs.9191/-.

    Please let me know if employee is getting Rs.7000/- per month, do we have to revised his salary to Rs.9191/- as per new wages act.

    What about PF— contribution would be 12% on Rs.8754/- or on Rs.7000/-.

    Kindly confirm..

    reply
    • gautham April 29, 2016

      If you revise the wage to comply with the minimum wage requirement, PF shall be 12% of the revised wage.

      reply
      • usha May 4, 2016

        Hi,

        Please let me know is it mandatory to revise the minimum wages ? or should I calculate 12%on basic wages ie on Rs.7000/-.

        Regards
        usha

        reply
        • gautham May 4, 2016

          Not sure what your question is. Are you asking if PF should be calculated on minimum wages?

          reply
      • usha May 19, 2016

        Hi,

        If I do not revise the wages and person salary is Rs.7000/- p, then do I have to deduct 12% of Rs.7000/- as PF.

        OR I have to deduct 12% on minimum wages as per act.
        Regards
        usha

        reply
        • gautham October 25, 2016

          12% of Rs 7,000 and not not the minimum wages.

          reply
  65. Ravi Agarwal April 27, 2016

    A company having 4 employees on its pay roll and taking service of security gaurds and others from other company – whether PF coverage is mandatory- considering all persons becomes more than 20

    reply
    • gautham April 29, 2016

      Please check if the manpower employed from other companies are covered under PF in the respective companies. If not, you may be liable to pay PF for them as the principal employer.

      reply
  66. venkatesh April 28, 2016

    HI Can anyone Knew about preset percentage of pf all companies are started different deduction in salaries all are saying as per new rule 2016 pf deductions are increased now am totally confused please help me below I mentioned my colleague salary numbers for reference gross is 21000 and basic20%hra20%canveyance10%lta10%medical10%others10%Fbp20%.deduction part is pf and gratuity and meal coupons(but he is not registered in meal coupons pf percentage 12% but I thought changed or not I don’t no exact details now he is getting 17789 3000 was deducted in gross is this right please help me

    thanks
    venkateshhrm@yahoo.in
    7207442648

    reply
    • gautham April 29, 2016

      We are unable to understand your question. PF should be calculated as 12% of (gross minus HRA) with an option to restrict PF to Rs 1,800 per month. There is no new rule related to PF calculation in 2016.

      reply
  67. somnath pahari April 29, 2016

    If an employee is having salary more than 15,000 then is EPF mandatory for employer?

    reply
    • gautham May 2, 2016

      If the salary is more than Rs 15,000 then an employee can be excluded from PF, subject to conditions.

      reply
      • Kaushal patel August 31, 2016

        What are the conditions under which company can exclude from PF ??

        reply
        • gautham September 14, 2016

          For an employee to be excluded from PF:

          a. He should be drawing a salary of more than Rs 15,000 per month.

          b. The employee shouldn’t have been a PF member earlier while in your organization. For example, an employee who is a PF member receives a salary hike which takes his salary to above Rs 15,000 per month. Just because his salary has gone above Rs 15,000, he cannot drop out of PF. Once a PF member, always a PF member until the end of his stint with your organization.

          A new joinee can be excluded from PF only is his salary in your organization is more than Rs 15,000 and he was not a PF member in your earlier organization and or have withdrawn his PF from his earlier employer. If he was a PF member in his earlier organization and his PF balance has not been withdrawn (even if his salary is more than Rs 15,000), he should be enrolled for PF in your organization and his earlier PF balance will have to be transferred to his current PF account.

          reply
  68. john May 7, 2016

    Hi sir,
    my salary 17500 (gross)

    basic 7000
    Hra 4000
    medical allo 1250
    special all 3250
    conveyance 2000
    they deducting Rs.1620 for pf and pt Rs.200
    how they calculating pf and this correct ??!!!!

    reply
    • gautham May 9, 2016

      PF = 12% of (gross – HRA) = 12% of Rs 13,500 = Rs 1,620. Their calculation is correct.

      reply
  69. eshwari May 30, 2016

    my salary is 18000 Rs. whether pf contribution is optional to pay or compulsory to pay the contribution.
    is there any option that the employer is restricted that we dint want to pay the contribution. what is the correct rule.

    reply
    • gautham May 31, 2016

      If you are already under PF, you cannot get out of PF just because your salary increases above RS 15,000 per month. If you have not been under PF so far and your PF salary is Rs 18,000, you can choose to opt of PF subject to conditions.

      reply
  70. shagun mahandru June 21, 2016

    sir.I want to ask shall special allowance be included in the wage for pf calculations or not? if yes ,tell me the related circular.also

    reply
    • shagun mahandru June 21, 2016

      ALSO TELL ME WHETHER THERE IS ANY PROVISION IN EPF ACT,THAT ALLOWS US TO DEDUCT PF ON 15000/- IF THE TOTAL SALARY EXCEEDS 15000/-

      reply
      • gautham June 27, 2016

        Yes, you can restrict the PF wage to Rs 15,000 and deduct PF on Rs 15,000 if the salary exceeds Rs 15,000.

        reply
    • gautham June 27, 2016

      Special Allowance should be included.

      PF Contribution is payable on all emoluments payable in cash to an employee during the month excluding the following:- (i) House Rent Allowance (ii) Over Time Allowance (iii) Bonus (iv) Commission or any other similar allowance; and (v) Any presents made by the employer

      As you can see from the above, PF should be calculated on all emoluments (including Special Allowance) except HRA and other heads which are explicitly excluded by the Act.

      http://esewa.epfoservices.in/faq.php – Please see question no. 43.

      reply
  71. suryavamsi June 27, 2016

    i want to know,if pf once applied always applies and please give me a calculated solution on these salaries.In 2012 to 2015-6000/_ per month In 2016-17500/- per month.Does pf applies for 2016? If applies on which 12% rate should be applied whether on 17500/- or 15000/-.

    reply
    • gautham June 28, 2016

      PF, once started, should be continued with until the end of an employee’s stint with an organization.

      The 12% rate can be applied on either Rs 17,500 or Rs 15,000, as per the wish of the employee and the organization.

      reply
  72. ravindra naidu p July 1, 2016

    whether employer can contribute more than RS.1800?

    reply
    • gautham July 2, 2016

      Yes, the employer can contribute more than Rs 1800.

      reply
  73. Madhu July 2, 2016

    1800rs deduct from my salary for PF. But in my UAN account only 1680rs added per month. Where is the remaining 120rs? Is there any hidden deduction?

    reply
    • gautham July 2, 2016

      There should be no hidden deductions. Please check with your employer in this regard.

      reply
  74. Rohit gupta July 29, 2016

    Is it wrong if we calculate pf on basic + da or is it mandate to calculate on basic + da+ con+med+spcl allowance plz let me know asap bcoz if it is so need to make changes or can we continue with the same ie pf calculated on basic +da

    reply
    • gautham July 30, 2016

      PF should be calculated on “basic + da+ con+med+spcl allowance” and not on Basic + DA.

      reply
  75. Ganesh August 30, 2016

    Hi

    what should be the minimum basic+ DA for IT company to contibute PF, am confused, some say it should be above 6500, so that PF contibution can be done accordingly. all employees are voluntarily opted for PF, we need to deduct EE and ER, what should be the minimum Basic+ DA please advice

    Regards
    Ganesh

    reply
    • gautham September 14, 2016

      Rs 6,500 is no longer valid. The PF salary limit is now Rs 15,000.

      PF is mandatory for a salary of up to Rs 15,000 per month unless an employee is excluded from PF (as per PF rules). Salary here refers to Gross salary minus HRA and other excluded heads of pay. Salary does not mean just Basic and DA.

      reply
  76. Vikrant Ambhore September 7, 2016

    Dear Sir,

    My Basic is 17100, now from this month my company started PF facility for all employee except me because HR told me your Basic is more than 15000 so compmay is not bound to give PF contribution.
    Is this correct please suggest me

    reply
    • gautham September 14, 2016

      If you were not a PF member in your earlier organization and or have withdrawn your PF from your earlier employer, you can be left out of PF. If you were a PF member in your earlier organization and your PF balance has not been withdrawn, you need to be enrolled for PF in the current organization and your earlier PF balance will have to be transferred to your current PF account.

      reply
  77. Ravi September 20, 2016

    can an employee has the option of not to contribute fund towards pension i.e. FPF, if his basic salary is above Rs.15000/-? please reply

    reply
    • gautham September 27, 2016

      Are you referring to EPS?

      reply
  78. Chandra September 22, 2016

    Dear Sir,

    my gross salary is 17600 (4400 basic+HRA2500+9972 )Others and deductions are PF 528+Professiona tax 200) and my take home salary is 16872.00.

    my question is what is minimum PF has to be deduct from employee (me).

    please advise, so that i will approach my employer.

    reply
    • gautham September 27, 2016

      Your PF should be 12% of (Gross Pay minus HRA).

      reply
  79. Avinash October 14, 2016

    My salry is 18000.i am member of EPF since 3 year.and this is my 1st organisation but my employer not giving employer contributions in Epf because my salry is above 15000.is it correct ?

    reply
    • gautham October 17, 2016

      If you are already a member of PF, the PF contribution cannot be stopped just because your salary has gone above Rs 15,000. Even if your salary goes above Rs 15,000, you should continue to remain a PF member until you leave the organization.

      reply
  80. harshit darji November 7, 2016

    sir we are employer(contractor) now the basic salary of our certain employee is more than 15000. and we neither deducted nor deposited pf but our principal employer said us that you have to deposit 1800 for each employee.so is it right? because we have not deducted pf so why we have to deposit

    reply
    • gautham November 10, 2016

      If your organization is under the PF net, you should be deducting and remitting PF. Not deducting PF when you are supposed to, is incorrect.

      reply
  81. Jijo December 2, 2016

    If the salary is 25000. What is the maximum contribution that can be deposited in EPF by employee. Is it mandatory the employer need to contribute same amount? Then what will be the employers contributions to EPF & EPS Accounts. Can the employer limit the contribution to 1800/-

    reply
    • gautham December 5, 2016

      The employee contribution can go up to 100% of the wages. The employer can limit the contribution to Rs 1,800 per month.

      reply
  82. amarjit December 5, 2016

    hi, is it possible that on employee’s request pf is deducted more to contribute more to pf account for saving purpose and employer can pay only 1800 /- minimum amount required.

    reply
    • gautham December 5, 2016

      Yes, absolutely. Employee can contribute a higher amount (than employer) by way of voluntary contribution. The employer can restrict contribution to Rs 1,800 per month.

      reply
  83. amarjit December 6, 2016

    again i want to know that how 18000/- gross salary can be divided into basic, da and hra so that esi and pf expenses can be reduced to minimum at employer’s end

    reply
    • gautham December 8, 2016

      Yes, the gross salary can be structured as per your organization’s policy.

      reply
  84. Priyanka January 5, 2017

    The gross salary pm. is Rs.10260. (Basic : 6669, HRA : 1539, CLA : 1026, TA :1026).

    Pl confirm the PF will be deducted on 6669*12% =800 or
    or 10260*12 = 1231

    reply
    • gautham January 5, 2017

      PF = (Basic + CLA +TA) X 12% = Rs 1047

      reply
  85. SOBHAN BABU P January 5, 2017

    Sir
    My gross salary is 4450 very less. Basic +DAaround 2700 is there any minimum gross or minimum pf wages like that if there means Pls info.
    How much minimum gross salary can be considered

    reply
    • gautham January 6, 2017

      There is no minimum gross for the purpose of PF.

      reply
  86. Pooja Sharma February 11, 2017

    Hello,
    My gross salary is 20000 but the basic is less than 15000 then can I get exemption from PF? Can I refuse for PF contribution? Kindly revert.

    reply
    • gautham February 12, 2017

      If your PF gross (Gross minus HRA) is greater than Rs 15,000, you can be opt out of PF subject to conditions.

      reply
      • Pooja Sharma February 17, 2017

        Thanks for your revert.

        reply
  87. Ram Kishan February 18, 2017

    Respected sir,
    Now this time my salary is
    Basic=12840 +Grade Pay= 2800 + D.A =20645 Total Rs. 36285/-. Hum abhi tak
    iska 12% Rs.4354 + employers share Rs.4354 = 8708/- bhejte rahe hein. Epf ded.
    01.09.2014 ke anusar 15000/- ka 12% bhejna tha. Lekin hume maalum nahi hone ke karan aisa hota raha. Pl.tell me that jo bhi employer’s share extra deduct hua hei
    kya employer humse vaapus lene ka huqdaar hei.

    reply
    • gautham February 21, 2017

      No, you cannot take back any contribution made so far. You will receive the PF balance in your account as and when you withdraw the same.

      reply
  88. DEEKENDRA February 25, 2017

    is there pf deduction from employee share (12%) possible, if any member having pf membership from 01.09.2014 and salary is more than 15000rs from the firtst doj..plz reply

    reply
    • gautham February 28, 2017

      Yes, employee can contribute more than 12%.

      reply
  89. Mahendra February 28, 2017

    Hi,
    We have been deducting and contributing PF on the total wages of the employees. Now, we are planning to restructure the salaries into Basic, DA, HRA, etc. As such, the PF contribution will go down. Can we go ahead with this after informing all employees of the effect or is it that we cannot reduce PF contribution once it is made for existing employees? Please advise.

    reply
    • gautham February 28, 2017

      As long as the minimum mandatory PF contribution is made, the department will have no issue with the move to restructure the salary.

      reply
  90. Pooja Sharma March 3, 2017

    Hello Sir,

    I am enrolled in PF. Due to some internal issues I don’t want to contribute in PF, it is totally loss for me and also I have crossed the limit of PF but one of our PF consultant said that once you have enrolled you will have to contribute always no matter that you are in PF limit or not. Kindly suggest the best way.

    reply
    • gautham March 3, 2017

      Once you have enrolled under PF, you cannot leave PF until the end of your tenure with the current employer. The advice provided by your PF consultant in this regard is correct.

      reply
      • Pooja Sharma March 3, 2017

        Thanks for your prompt reply. Kindly suggest in case if I switch to another job then can I do the same?

        reply
        • gautham March 3, 2017

          If you switch jobs and your new company is under PF, you can only transfer PF to the new PF account. In case you withdraw your PF and then join a company, you can choose not to be under PF in the company in case your salary is more than Rs 15,000 per month.

          reply
          • Pooja Sharma March 6, 2017

            Thanks a lot.

          • Sekar March 6, 2017

            If all employees drawing basic higher than 15000 opt out of PF scheme, then ‘Statutory’ carries no meaning. As per Security Act. Sec 17 1. a/b, it clearly says that “Any establishment or employees contributing to an alternate PF retirement scheme instrument elsewhere can seek exemption from PF contribution’. By any case, the employer & employee are bound to contribute on restricted wages of max 15000. It stresses that it is the duty of the employer to enrol the employee in EPF. I request the learned members to correct me if wrong.

          • gautham March 7, 2017

            Note sure if I have understood you correctly. Your point regarding alternative PF scheme does not seem to be relevant here.

            An organization can have a situation where all the employees are excluded employees from the point of view of Provident Fund. In such a case, the organization should continue paying administration charges alone to the PF department each month.

  91. Rajashekhar March 8, 2017

    My salary is 25000 p.m but our society telling no need to pay pf is it right r wrong plz reply early.

    reply
    • gautham March 9, 2017

      It depends on a variety of factors. You need not pay PF if your salary is Rs 25,000 only if you fall under the definition of excluded employee.

      If you are already under PF, you cannot opt out of PF just because your salary increases beyond Rs 15,000.

      reply
  92. RAM KISHORE GUPTA March 28, 2017

    I have registered all my employees under EPF and out of them 3 employees basic salary is above 15000. Since I have registered them under epf and taken their uan no will it be compulsory to pay their pf or that can be excluded with the concent of employee

    reply
    • gautham March 29, 2017

      You can exclude them subject to conditions. If the employees were under PF with their earlier employer and did not withdraw their PF prior to joining your company, you cannot exclude them from PF.

      reply
      • ram kishore gupta April 6, 2017

        they are fresh employee and never worked earlier, so can i exclude them from epf even uan number is generated with their consent

        reply
        • gautham April 7, 2017

          If they are getting employed for the first time and their PF salary is more than Rs 15,000 per month, they can be left out of PF. I do not understand the part about UAN in your question.

          reply
  93. r s pandi April 5, 2017

    sir my doubt is if i am getting Rs.43000/- , than what should be the Basic salary.

    reply
    • gautham April 5, 2017

      Kindly check with your employer regarding the salary break-up.

      reply
  94. r s pandi April 5, 2017

    somebody told me to Rs.15000/- is basic salary. is it right ? and somebody told me Rs.9000/- is basic salary of Gross amount Rs.43000/-.

    reply
    • gautham April 6, 2017

      I am unable to understand your question. Please rephrase it.

      reply
  95. rs pandi April 7, 2017

    Sir,

    i am doing a part time job in company as an accountant , now they are given some EPF related jobs to me. my question is When a employee registered with EPF that time employee’s salary was Rs.20000/- , and that time Basic pay was Rs.7000/- . and now his salary increase Rs.43000/-. then what should be the basic amount for Rs.43000/-

    reply
    • gautham April 7, 2017

      There is no legal requirement related to the relationship between Basic and gross pay. Organizations typically keep Basic at 40% to 50% of the gross pay.

      reply
  96. rs pandi April 7, 2017

    Sir
    I have one more question if any employee already registered with EPF and he left the job. After that he claimed his EPF amount fully. and after few months he want to join with same co. that time his salary package is above Rs.20000/- pm. shell we avoid the employee with EPF registration.

    reply
    • gautham April 7, 2017

      It depends. If the employee did not withdraw his PF after leaving your company, his PF should be continued with when he rejoins the company.

      reply
  97. DEEPAK UPRETI April 10, 2017

    IF A PRIVATE EMPLOYER (DELHI) CONTRIBUTE TOWARDS EPF AND ESI SO THAT MEANS THAT EMPLOYER HAS TO FOLLOW THE MINIMUM WAGE RATE ACT AS PER DELHI GOVERNMENT.

    PLEASE REPLY URGENT.

    reply
    • gautham April 10, 2017

      The minimum wage has nothing to do with PF and ESI. Not sure what your question is.

      reply
  98. Gautam April 19, 2017

    Hi,

    I am an international worker and I have the following questions:-

    – What is the maximum PF Deduction amount for the entire year? Is there any ceiling limit?

    – If I want to opt out of EPF, can i do that?

    – Do I need to pay Employee and Employers contribution as an international worker?

    Please advise.

    reply
    • gautham April 19, 2017

      1. What is the maximum PF Deduction amount for the entire year? Is there any ceiling limit?

      Ans: There is no ceiling on the salary on which the contribution has to be made by both the
      employer and an employee.

      2. If I want to opt out of EPF, can i do that?

      Ans: No, you cannot opt out.

      3. Do I need to pay Employee and Employers contribution as an international worker?

      Ans: Yes, both employer and employee contributions need to be paid.

      reply
  99. priyanka April 26, 2017

    Hi,
    i have one question if salary amount is 30k and employee pf amount is 1800, how can i calculate basic and hr if company did not give any other allowances. means i salary component is only basic and hra.

    please reply

    reply
    • gautham April 27, 2017

      We cannot calculated Basic from the information you have provided.

      reply
      • priyanka April 29, 2017

        Then what else you require for calculation of basic?

        reply
        • gautham April 29, 2017

          I said we cannot calculate Basic because there is no standard formula for Basic calculation. Organizations typically keep Basic at 40% to 50% of gross. Also, we do not know if the PF amount you have specified is on the restricted Basic.

          In your example, both the following are possible.

          1. Basic = 20,000 and HRA = 10,000 and PF 12% of restricted Basic = Rs 1,800

          2. Basic = 15,000 and HRA = 15,000 and PF 12% on full Basic = Rs 1,800

          reply
  100. Nishit May 29, 2017

    Hi,

    When i joined the organisation, my Basic was less than 15000, accordingly i have to allow my employer to deduct the PF.

    However, as recently my salary has been revised, so can i stop my PF as my revised basic is more than 15000. if my employer deny to follow this how i can proceed ahead.

    Regards

    Nishit

    reply
    • gautham May 29, 2017

      Once PF starts, it cannot be stopped until you leave the organization.

      reply
  101. RAKESH May 30, 2017

    Mu Basic salary is Rs 120,000 pm. Employee pay rs 1800 towards PF contribution.
    Can I pay 12% of my basic salary as my contribution.
    Whether it will be Tax exempt and under which clause. I have a separate PPF account and have LIC also.
    If interest earned also will be tax free.

    reply
    • gautham June 2, 2017

      1. Can I pay 12% of my basic salary as my contribution.
      Ans: Yes, you can.

      2. Whether it will be Tax exempt and under which clause. I have a separate PPF account and have LIC also.
      Ans: Deduction is available under Section 80C of the Income Tax Act (which includes PPF and LIC premium).

      reply
  102. Sanjay July 3, 2017

    Hi,

    For basic pay of 20,000, employee pf contribution @12% is being deducted at 2400. In this case, what should be the employer contribution whether 1800 or 2400?

    If minimum contribution from employer is 1800 in above case, what is wrong if employer is also contributing 2400 to match to employee contribution?

    Thanks,

    reply
    • gautham July 4, 2017

      In the case you have cited, the employer can contribute more than Rs 1,800 in order to match the employee contribution. There is nothing wrong in it.

      reply
  103. AKHIL July 10, 2017

    hi, in my case, my gross salary is 18000(basic+da=11700,hra=4600,other allowance 1700). and I would like to know which amount is calculating as PF Amount .whether i am applicable for PF contribution?

    reply
    • gautham July 10, 2017

      PF = (Gross – HRA) X 12% in your case. Yes, you are to come under PF unless your organization is not registered with PF.

      reply
      • khirod July 19, 2017

        hlww dear sir ,Sir here my question is pf amount only deduct basic+da then how is it possible here you included conveyance.

        reply
        • khirod July 19, 2017

          i mean other allowance 1700

          reply
        • gautham July 21, 2017

          PF should be calculated on gross (not on just Basic and DA) after leaving out heads which are to be excluded as per the PF Act.

          reply
  104. suresh Manickam July 13, 2017

    Hi Gautham,

    I am working in Company A. Company A Sell our Department to Company B. Company A PF is Transfer the details to Company B. Now i have 2 PF numbers under one UAN number.

    1. Is it Possible to withdraw my Company A PF amount ? If Yes How ?
    2. My Gratuity maturity would been Affected ?
    3. Without my knowledge is it possible to transfer my Previous PF account to New PF Account ?
    4. Company A – Service is 8.5 Years. As per gratuity act 4.7+ Years i working in the same organization, i eligible to Gratuity. Now my Gratuity is been Continuing this Company ?

    Regards,
    Suresh M.

    reply
    • gautham July 17, 2017

      Kindly check with your company in this regard since I am not sure about the terms of the takeover. However, let me attempt to answer your questions.

      1. Is it Possible to withdraw my Company A PF amount ? If Yes How ?

      Ans: If you are moving to another company on account of the sales of business, you can transfer your PF to the new company by making a transfer request online.

      2. My Gratuity maturity would been Affected ?

      Ans: Your new company will, most likely, recognize your service in in company A and calculate gratuity accordingly.

      3. Without my knowledge is it possible to transfer my Previous PF account to New PF Account ?

      Ans: No, PF cannot transferred without your knowledge.

      4. Company A – Service is 8.5 Years. As per gratuity act 4.7+ Years i working in the same organization, i eligible to Gratuity. Now my Gratuity is been Continuing this Company ?

      Ans: In all likelihood, the answer is yes. But please check with the HR/compliance team in your company for a clear answer.

      reply
  105. pratik kadam July 28, 2017

    hii sir,

    my gross salary 20000 now,11000basic+(da,hra ND other allowence)…i joined 16000 basic7000+2000da…can i eligible for pf scheme.

    reply
    • pratik kadam July 29, 2017

      when i joined company my salary is 16000 and after the training period of 6 month..hr says your not eligible for pf scheme because your joining salary is above 15000…7500 bacic+2000 da+other allowance…its right?…who r eligible for pf scheme..

      reply
      • gautham July 31, 2017

        Did you work elsewhere prior to this employer and were you covered under PF in your previous employment?

        reply
    • gautham July 31, 2017

      Yes, you are eligible to come under PF.

      reply
  106. NEERAJ KILHORE July 28, 2017

    Hi,

    My employer follows PF ceiling limits but i want to increase employee contribution
    in PF to 12% of basic.
    My employer is denying to increase my contribution. Is this denial legal?

    reply
    • gautham July 31, 2017

      You can contribute a higher PF amount as voluntary contribution.

      reply
  107. Ramesh Sharma September 12, 2017

    A registered PF member company employs a new employee on contractual basis on a consolidated salary of Rs. 25,000/-. The employee does not want any PF deduction out of his salary. He was not member of PF in the past also. Can this company do this. Is there any PF violation if PF is not deducted out of his consolidated salary.

    reply
    • gautham September 20, 2017

      The employee can stay out of PF.

      reply
  108. Yamini Srivastava October 6, 2017

    Sir my company said my ctc is 13000 but basic is 11607, however my pf of 12% is deducted from basic salary i.e 11607 and 12%of employer is also deducted from the salary. Is it legal to deduct both the pf 24%from my salary????

    reply
    • gautham October 30, 2017

      No, employer contribution should be separate component in your compensation. The company cannot deduct employer contribution from your salary.

      reply
  109. Priyanka November 8, 2017

    Epf limit is 15k…plz tell me one thing… We consider total salary ya basic salary for pf… Luke my salary is 35k and my basic salary is 14k thn I my pf is deduct or not… Plz tell asap.

    reply
    • gautham November 16, 2017

      Should consider total salary except components such as HRA.

      reply
  110. Harsh January 6, 2018

    gross salary for pf 21000
    net payable salary 19000 ( due to less paid days) of 20 paid days
    is pf deductible is Rs. 1800
    or
    18000/31*20.

    reply
    • gautham January 9, 2018

      PF amount = 12% of (Gross – HRA).

      reply
  111. Bineetha Baiju January 11, 2018

    Dear sir, I have a lot doubts in the following matters, please clear my doubts
    1. if a company has 12 employees and 8+ trainees , do the company need to register under EPF ?
    2. Even if the company has to maintain EPF, do an employee whose salary is less than 15000/- need to contribute to PF?
    3. If the employee has 10000/- salary, net amount payable after deduction of leave is 9000, in which amount PF is calculated?

    reply
    • gautham January 11, 2018

      1. if a company has 12 employees and 8+ trainees , do the company need to register under EPF ?

      Ans: No

      2. Even if the company has to maintain EPF, do an employee whose salary is less than 15000/- need to contribute to PF?

      Ans: Yes.

      3. If the employee has 10000/- salary, net amount payable after deduction of leave is 9000, in which amount PF is calculated?

      Ans: PF = 12% of (Gross pay minus HRA and other heads excluded from PF)

      reply
  112. paresh January 20, 2018

    Dear Sir,
    As a employee if i do not want to get my PF deducted, is there any option or way out?

    reply
    • gautham January 23, 2018

      There is no way out. You have to remain a member of PF until the end of your employment with your current employer.

      reply
  113. Manas February 5, 2018

    Dear Sir,
    one of the security agency paid security gross salary Rs. 9000/- and deducted PF amount 12% on Basic. i told him In case the wage drops below the minimum wages, PF should be calculated on minimum wages but they are not going to agree with me and told me nobody will calculate on the Gross. what should i do ? which notification i should show them ?
    Basic DA Conv TOT. Food Allow Gross Salary PF ESI Net Salary
    3000 2500 2500 1000 9000 360 158 8483

    reply
    • gautham February 13, 2018

      There was a circular from the PF department that PF should be calculated at least on minimum wages. However, the circular is not currently in effect on account of a court case regarding splitting of wages for the purpose of PF calculation.

      reply
  114. Avinash February 13, 2018

    If any employee say Mr. ABC join any Company XYZ and at the time of joinig his Fix Basic is Rs. 30000/- but company restricated his Basic to Rs. 15000/- for PF deduction..

    In the month of Mar he work for 13 days so his Earning Basic will be Rs. 12581/- but Comapny deducted EPF on Rs. 6290/- considering Fix basic 15000

    i need u r opinion in this case

    reply
    • gautham February 21, 2018

      The PF calculation done by the company for March is correct.

      reply
  115. sanjay r February 14, 2018

    Dear sir, madam

    Which are all allowance come to pf scale i what know this process because our employee taken 20000 above salary but pf will decoration is Employee s and employer dedication its coming 3800

    our Description is give below
    Basic Salary
    HRA
    Conveyance
    Medical Reimbursement
    Special Allowance
    total (Basic Salary+Conveyance+Medical Reimbursement+Special Allowance)

    Dedication of pf (Total -E.pf+ErPF also = net home)

    That only our employeee salary will less Know tell me other then allowannce not app able for PF

    reply
    • gautham February 21, 2018

      All heads of pay in your list, other than HRA, should be considered for PF calculation.

      reply
  116. Karthik February 14, 2018

    Hi sir initially my basic was (basic+da) is 15000 and 1800 used to cut for pf I left the job and rejoined in the same company with new empty I’d and I am asking them to cut pf and my basic+da is 17500 they t telling I am not eligible for pf I am having UAN number is there any chance for me for pf contribution and
    One more doubt they r telling that there is a chance that they will be cutting 1800+1800 for my salary and contribute in my pf that means employer and employee deposit from my side only is it possible and any advantage of that pls tell me sir.

    reply
    • gautham February 21, 2018

      If you rejoin the company, your PF contribution should be continued with.

      reply
  117. Yogesh March 31, 2018

    1) I working in Small scale company last I had salary 10000 including all , was it mandatory to have or maintain PF account??
    2 ) now my salary is 18000 ,now I want maintain my PF .. is it ok?
    3) what is mean that minimum wage is 15000 for PF recent curriculum

    reply
    • gautham April 2, 2018

      1) I working in Small scale company last I had salary 10000 including all , was it mandatory to have or maintain PF account??

      Ans: PF is mandatory if your company has 20 or more employees.

      2 ) now my salary is 18000 ,now I want maintain my PF .. is it ok?

      Ans: Yes, it is.

      3) what is mean that minimum wage is 15000 for PF recent curriculum

      Ans: If you salary (for PF calculation) is more than Rs 15,000, then PF should be calculated on at least Rs 15,000.

      reply
  118. ADITYA NATH MISHRA April 4, 2018

    WHAT IS THE CALCULATION IF THE BASIC SALARY IS 7500/- AND THE GROSS SALARY 12500 (INCLUDING ALL OTHER ALLOWANCES) AS PET EPF RULES.

    reply
  119. Chander Pal April 10, 2018

    If the basic salary of the anyone is 40,000/- per month

    Is it mandatory to deduct PF?

    If yes, What could be the min. employee and employer contribution for the said basic salary?

    Thanks!

    reply
    • gautham April 12, 2018

      Yes, it is mandatory if the employee is already under PF. The minimum PF (employee and employer contribution) shall be Rs 12% of Rs 15,000. However, both the employer and employee can contribute more than 12% of Rs 15,000 if they wish.

      reply
  120. akshay April 11, 2018

    hi ,
    if we join a new employee in our company whose salary is 15100, is it elligable for epfo or is that enough to contribute for esic.
    if so if any GO is there pls give us.

    reply
    • gautham April 12, 2018

      1. The new employee is eligible for EPF.

      2. The employee should be covered under ESI.

      reply
  121. Tejinder April 18, 2018

    My ugc funded college employer and my PF deduction is 10% each not 12%.
    What are consequences?
    Are we eligible for EPS?

    reply
    • gautham April 26, 2018

      Incorrect PF deduction can attract penalties under law.

      reply
  122. Harini S April 23, 2018

    What is the procedure for limiting PF contribution to INR 1800 i.e. 12% of 15,000 instead of 12% of PF Gross? Is there a form for this? Whom should such form be sent to?

    reply
    • gautham April 26, 2018

      There is no process per se. Please ensure that the PF ECR details are accurate.

      reply
  123. kamal bhatt April 25, 2018

    pls. clarify if any change in pf wage basic amt. rs.15000/- ? ded. wage rs.25500/-

    reply
    • gautham April 26, 2018

      Basic wage limit for the purpose of PF is Rs 15,000 per month.

      reply
  124. Prasad G May 29, 2018

    My Salary 60000/Month, But still my company debit pf amount only 1800/-
    Other company debit 12% of total salary. why is different.

    reply
    • gautham May 29, 2018

      As per PF rules, the minimum PF amount your company should deduct is Rs 1,800 for your salary. However your company can also deduct 12% of salary as PF if it so wishes.

      There is nothing wrong in what your company is doing.

      reply
  125. Krishna Solanki May 29, 2018

    Hi sir
    My sister working in private company since one year
    Her CTC monthly is 55000

    Their company is under EPF registered

    At time of joining my sister didn’t know and they also didn’t deduct EPF
    Now they are saying fill form that u don’t want EPF or if u want EPF then they will deduct both share from her salary n they will show to govt one salary deduction

    Now u tell me will she get EPF
    And also show me legal proof show that she can show to her company
    Thanks

    reply
    • gautham May 29, 2018

      Your sister can ask her company to include her under PF. She need not show any documentary proof for inclusion under PF.

      reply
  126. Anand October 10, 2018

    My query is – is minimum wage same as Basic salary. If not then PF act may not be applicable to Basic ?

    In our organization, the sum of Basic + other allowances are more than 15000. However, the PF has been deducted from Basic sum only. Hence in some case , where the employee is earning basic lesser than 15000 , his PF deduction is less than 1800.

    Is it legally allowed?

    reply
    • gautham October 26, 2018

      No, PF should be calculated on gross (after excluding heads such as HRA) and not just on Basic.

      With regard to your question, the answer is, “it is not legal.”

      reply
  127. mahesh January 5, 2019

    Sir,

    A pf member left A company and join B company where his basic wages is more than 15000, can he be restricted to become pf member or he has to continue as a pf member, pls clarify with any circular.

    thanks

    reply
    • gautham January 17, 2019

      He shall continue to be a PF member. He cannot opt out of PF when he moves to the new company even if his salary in the new company is more than Rs 15,000 per month.

      reply
  128. Soumitra Paul July 1, 2019

    Hi,

    I would like to know if an employee is receiving Rs.7000 per month (consolidated) which is less than minimum wages as per the state wage table. Do that person need to contribute to PF?

    reply

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