Those earning basic wages more than 15000 per month, EPF contribution is not mandatory. Also, the employer can choose to limit its contribution towards EPF to 12 per cent of Rs 15,000 (Rs 1,800) under Section 26A of EPF act for those employees earning more than Rs 15,000 per month as basic wages.

Can basic salary be less than 15000?

If your basic salary plus DA is less than ₹15,000, you will be affected if you have allowances and payments such as conveyance or bonus (which is not linked to performance) as part of your CTC as the EPF calculation will happen on a higher figure.

Can employee choose not to contribute EPF?

If you’ve never made any contributions towards EPF, ever, you can choose not to contribute towards EPF. If your basic monthly salary is over Rs. 15,000, you can opt out of your EPF contributions if you want to (although it isn’t recommended that you do this).

What is the maximum PF contribution by employer?

– However, as per the norms, your employer can only contribute a maximum of 8.33% of the threshold amount of Rs. 15,000 towards your EPS. This means that your employer can only contribute a maximum of Rs. 1,249.50.

What is the new rule of PF deduction?

Any company with 20 or more employees is enabled with the option to deduct EPF. For EPF, an employee contributes 12 per cent of the basic salary while the employer contributes 8.33 per cent towards Employees’ Pension Scheme and 3.67 per cent to employees’ EPF.

What is the maximum limit for EPF?

EPF Limits A payment of 0.5%, of the total wages amounting to a maximum of Rs. 15,000 has to be done by the employer every month, against the Employees’ Deposit Linked Insurance Scheme. Under the Employees’ Deposit Linked Insurance Scheme a maximum of Rs. 3,60,000 per annum.

What is minimum basic salary for PF?

The change in basic wage will result in a change in contribution towards PF in cases where the employer is contributing towards PF on the actual basic salary rather than the minimum required contribution of 12% of ₹15,000 (the minimum wage for PF contributions).

Is there a minimum PF contribution of Rs 15, 000?

Please ensure that PF deduction and contribution are calculated as per the new wage ceiling of Rs 15,000 from Sep 2014 onwards. 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.

Is it mandatory to deduct PF from salary less than 15000?

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.

Is there a limit on amount an employee can contribute to PF?

There is no limit to the employees’ contribution to PF, he can contribute up to 100% of his Basic + DA (PF Wages) towards PF, but it must be a minimum of 12 per cent of the same. However, if your employee draws a salary more than Rs.15,000 per month, then he/she can also choose to not contribute to the Provident Fund.

Where can I find my employer’s contribution to my salary?

Usually, the contribution from the employer can only be seen in your offer letter and not in the payslip. Contribution from your salary is called EPF and it can be seen in the payslip. Contribution to the provident fund is mandatory for Indian companies. PPF is a voluntary contribution by the employee and is completely controlled by him/her.