Is the PF deduction mandatory for employees who have a salary more than 21000 rs?

They said the deduction as per Employees Provident Fund (EPF) should be done for those persons receiving Rs 21,000 as monthly salary. Meaning, the minimum criteria or salary for which deduction under EPF is being done should be increased to Rs 21,000.

How do you calculate employee contributions?

To understand how the EPF calculator works, let us have an example. Employers contribution towards EPS = 8.33\% * 14,000 = Rs 1,166. The total contribution by the employer and employee towards the EPF account of the employee = Rs 1,680 + Rs 514 = Rs 2,194.

Can employer choose not to contribute EPF?

The employer can be charged for not paying an employee’s EPF. “Any employer who fails to make contribution on or before the 15th of every month shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding ten thousand ringgit or to both.”

Is PF deducted from basic salary?

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.

How much is PF of basic salary?

You and your employer need to transfer 10\% or 12\% of your basic salary to contribute towards EPF. However, if you are a woman, you only need to contribute 8\% of your basic salary for the first three years. During this period, your employer’s EPF contribution will remain 12\%.

Why is basic salary important?

“Generally, a higher basic pay enhances the tax exemption limit for HRA. It also increases contribution towards retirement benefits like provident fund (usually 12 per cent of the basic pay) and superannuation fund, which means a lower take-home salary,” says Parizad Sirwalla, partner, Tax, KPMG.

Can an employee contribute more than 12\% of their salary voluntarily?

Employees can contribute more than 12\% of their salary voluntarily, however the employer is not bound to match the extra contribution of the employee. For PF contribution, the salary comprises of fewer components: – Special allowance. The employers monthly contribution is restricted to a maximum amount of Rs 1,800.

What is the maximum amount an employer can contribute to PF?

For the PF deduction, the maximum limit of salary of the employee is Rs 15,000 per month. This means that even if the employee’s salary is above Rs 15,000, the employer is liable to contribute only on Rs 15,000 that is Rs 1,800.

Is 15000 PF deduction mandatory after increment in salary?

But in case Salary is less than and equal to 15000 PF deduction is mandatory and after increment its also mandatory. If the salary of an employee is more than Rs.15000/- at the time of joining, then

Is contribution to Provident Fund mandatory on basic salary?

On the other hand, contribution to provident fund is mandatory if the basic salary of an employee is less than Rs 6500. We can consider another employee B with a basic salary of Rs 4500, who has to compulsorily contribute towards PF as his salary is less than Rs.6500.