Is Contribution to Employee Provident Fund Mandatory?

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#FrequentQuestionAnswered

Is it compulsory to contribute to the Employee Provident Fund ?

We have come across this question frequently. Let’s address it.

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Answer:
"Yes, contributing to EPF is mandatory for the employees who have a basic salary plus dearness allowance is up to Rs.15,000 (earlier it was Rs.6,500). And those who are earning above Rs.15,000 may contribute voluntarily.

But the decision to opt out of scheme should be taken at the start of your career. In case, you have been a member of EPFO once, then you are not allowed to opt out of the scheme.

Opting out of the scheme will increase your in-hand salary and thus your tax outgo will also increase, so it is strongly recommended to avail this scheme as this is the easiest way to build a corpus for retirement."

In case of related questions on EPF contributions, please click on “+New Topic” in here and post your questions. Our experts are here to guide you!

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Hi,

Yes, contribution to EPF is mandatory for the employees whose EPF wage is up to 15000/- and employees whose EPF wage is more than 15000/- can opt for EPF deduction.

However, opting for EPF is purely depend on your previous EPF status. Even once if you been a member of EPF then you cannot opt for “Out of PF Scheme”

Hope this information will help you .

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It helps. Thanks @Arpana

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What if I have a new joinee whose wages are more than 15k and his prior organization was not deducting PF , but he was PF member in employment previous to last employment. Would it be mandatory for him to opt for PF when he join us?

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Hi Mitul,

Once you became the PF member then you have to be a PF member . You cannot opt for it.

Hope this reply will help you.

Regards
Arpana

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Thank You! Aparna. Yes this clarifies

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Actually @Mitul the previous organisation did a mistake by not doing the PF enrolment for that employee.

In real - when you enter the AADHAR number of that employee now - UAN will identify any previous information of that candidate.

If he has not linked with AADHAR - then a new UAN will be generated, but since he had PF account already - It’s advisable to please enrol him into PF.

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