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  • Category: Central Government

    Employees Provident Fund Rules when basic+DA crosses Rs.6500


    Want to know about the rules of The Employees Provident Fund Organisation (EFPO)? Learn more about the basics of The Employees Provident Fund Organisation (EFPO) rules here.

    The Employees Provident Fund Organisation (EFPO) makes it compulsory for deduction of EPF from employees @ 12% of Basic+DA if the Basic+DA is Rs.6500 or below per month with an equal contribution from the employer. What is the rule of deduction of the EPF if the employees salary becomes more than Rs.6500 due to increment or revision of his salary while working in the same organisation. Is the deduction @12% compulsory for such an employee. What if the employee refuses contribution since his salary has crossed Rs.6500, what will the contribution of the organisation in such a case. Can someone quote the relevant order or rule of the EFPO in this regard?
  • #97077
    Employees drawing a basic of Rs.6500/- have to compulsory contribute to the Provident fund and for the employees receiving above Rs.6501/- have an option to become a member of provident fund.
    If the salary of employees salary is increased above Rs.6501/- due to increments, he/she should still contribute for PF at least to the upper limit for contribution of Rs.6500/-

    For example if your salary is increased to Rs.7500/-
    Your EPF may be calculated in 3 ways:
    1. EPF(employees share)- 7500 X 12%
    EPF(employers share)- 7500 X 12%-(EPS)

    2. EPF(employees share)- 7500 X 12%
    EPF(employers share)- 6500 X 3.67%

    3. EPF(employees share)- 6500 X 12%
    EPF(employers share)- 6500 X 3.67%

    Once you had an EPF you can't opt out it. It is possible only in case of the person who is new to job and basic is above Rs.6500.

  • #97096
    Dear Sir,

    Employer is bound to provident fund, if the number of employees exceeds 20 which are covered under the Employee Provident Fund Act, 1952.

    Rate

    The employees PF contribution is 12% of the basic + DA (Employee Salary)

    The employer has to contribute 12% of the basic+ DA. This is as below:
    Employees PF - 3.67%
    Employees pension scheme - 8.33%

    Ceiling Limits:

    Employee – Minimum 12% of the Basic + DA or Maximum 100% of the Pay

    Employer – Maximum and Minimum is 12% of the Pay


    If Employee is Member of Scheme

    Up to 6500 per month (Basic +DA) - 12% of Basic +DA is Mandatory

    Rs 6501/- & above (Basic +DA) – Decision of organization

    If Employee is not member of Scheme

    Up to 6500 per month (Basic +DA) - 12% of Basic +DA is Mandatory

    Rs 6,501/- & above (Basic +DA) - It is not Mandatory


    For Employers:

    Maximum and Minimum is 12% of the Pay

    Regards, Anand


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