Employee Provident Fund

Dear Team,

This question is related to employee provident fund

As we know that there is cap for PF contribution Salary is Rs 15000/- ( BASIC+DA+Conveyance+Medical+Special Pay) which is lesser, then EPF contribution is mandatory.

I need more clarification on below questions :

  1. But if it is more than the cap then is it mandatory or not ?
  2. If it is more than cap the employee can decide whether he can take up EPF contribution or not ?
  3. If the employee is 58 years + then EPF is applicable or not ?

Thanks in advance

Madhu
Financial Analyst

2 Likes

Hi Madhu,

In any scenario EPF deduction is mandatory if an employee becomes a EPF member anytime in his/her career irrespective of PF wage. Employee has to opt for EPF contribution. For those who are fresher or never been a EPF member to them you can provide the option to opt.

1.As I said it is EPF contribution is mandatory . If PF wages are more than 15000/- then company can decide to deduct on actual Basic or to seal it to 15000/-. Employee cannot decide if an employee becomes a EPF member anytime in his/her career.

  1. Your second query is answered in point No 1.

  2. If an employee attain 58 years of age then to he cannot decide. Only change will be his EPS of 8.33% contribution will merged with Employer contribution of 3.67% which means employer contribution will no more bifurcate .

I hope this information will be useful for you.

2 Likes

Hi @Madhu

Let me answer one by one.

  1. But if it is more than the cap then is it mandatory or not?

If it’s more than the cap it’s not actually mandatory ‘only if that employee’ does not have any active PF accounts from any of the existing organisations.

If there’s already a PF account active then in the new company PF has to be deducted, but if that employee has withdrawn the PF and closed the account, again it’s not mandatory as he does not hold an active PF account.

  1. If it is more than cap the employee can decide whether he can take up EPF contribution or not ?

Yes! He can decide and he can also think about VPF if required.

  1. if the employee is 58 years + then EPF is applicable or not?

If it’s above 58 only employee contribution stops but the employer has to still pay their contributions with respect to PF accounts.

Hope this helps.

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