Is It Mandatory to Deduct PF from Salary More than 15000?

Under section 26 A of the employee provident fund act 1952, if your monthly basic wage is above 15,000 Rs then the employer can calculate PF on 15000 Rs only.

For example, if your basic wage is 20,000 Rs then your employer will calculate PF only on 15,000 Rs i.e 12% of 15,000 is 1800 Rs that is employer PF contribution.

But employees can deposit PF contribution even above 15,000 Rs basic wage as per their wish, but your employer can limit their contribution to 15,000 basic wage only. Employers will separate these amounts in the EPF ECR file, and make the payments every month.

Is It Mandatory to Deduct PF from Salary More than 15000 notification

Can employee pay PF for a salary more than 15000

Yes, employees can pay PF for a salary of more than 15000 Rs, in that case, 12% of their salary will be paid towards employee PF contribution, which will come under voluntary PF contribution.

But your employer doesn’t have any obligation to calculate their contribution on increased salary, they can limit their contribution to 15000 pay only.

The benefit of paying PF on more than 15000 Salary

The main benefit is the interest rate, at present EPF is providing an interest rate of 8.50% it is better than bank interest rates. If you are a conservative investor and don’t want to risk your money by investing in the stock market then investing your money in EPF is one of the best options.

Is it mandatory to deduct pf from salary more than 25000?

If your starting salary is above 25000 Rs then it is not mandatory to deduct PF.  But if you are already a member of EPF and your monthly salary increases to above 25000 Rs then you have to continue your PF contribution, but PF will be calculated on a limit 0f 15000 salary only.

If you want to pay additional PF contribution then you can pay that amount under voluntary PF contribution.

FAQs

What is the maximum amount of PF deduction?

The maximum amount of PF deduction is 1800 Rs, it is calculated on a maximum PF contribution limit of 15000 Rs.

How much EPF is deducted?

12% of employee basic wage + dearness allowances will be paid as a monthly contribution towards PF and at the same time employer will also pay another 12% PF contribution. In which 3.67% goes to PF and the balance 8.33% goes to the pension account of the employee.

Is PF deducted from Gross salary?

No, PF is always calculated on basic wage + dearness allowances. If the company doesn’t pay dearness allowances then PF is calculated only on the basic wage.

Is PF mandatory for every organization?

Every organization which employees 20 or above 20 employees should register their establishment under the employee provident fund act 1952.

Also Read

24 thoughts on “Is It Mandatory to Deduct PF from Salary More than 15000?”

  1. Sir namste ,
    पिछले कंपनी मे pf कटता था लेकिन अभी वाली कंपनी नही कट रहा है take home 23000 h तो मै क्या कर सकता हुँ pls बताये

    Reply
  2. Hi, so in my first corporate job my CTC was Rs.2,50,000/- p.a. and I requested them not to deduct pf and they allowed.. I used to get Rs19,800/- in hand. But after few months I am switching to a new corporate company where my ctc is Rs.3,75,000/- but they are saying it’s mandatory to contribute to PF! Why ? Can you help me here ? Thank you

    Reply
    • Yes it will become mandatory because your Per month salary is Rs.31,250 and also the new corporate you joined would already been having employed more than 20 person . so it becomes mandatory. If u still confused than read the above explanation and map in your notepad then u can easily remember.

      Reply
  3. An employee whose actual basic pay is Rs.35000/- pm, but his PF is being deducted on 15000/- i.e. Rs.1800/- pm according to the proportion of number of payable days. He absented for 16 days during the month of Nov, and his PF was deducted as per the calculation 15000/30*14 = 840/-.

    If it is ok, pl furnish supporting documents

    Reply
  4. Hello Everyone,

    I’m working in one of the small startup companies and they were giving all net pay as a monthly salary. they were not deducting PF since they have less than 20 employees. I got an offer from another company. Is there any certificate I should provide to the offered company? Can you please help me here?

    Reply
    • Regarding PF you don’t need any certificate. But in general companies aks you to submit experience letter and payslips.

      Reply
  5. If I am a UAN (PF) member, joins another company where my basic salary exceeds pf ceiling limit of 15000 basic :-

    Point 1. Is it mandatory to deduct pf in new company where I joined

    Point 2. In case if i withdraws my old PF and joins another company whats is the minimum period of gap it requires (Leaving one company & joining another company

    Point 3. In case if i withdraws my old PF and joins another company is it mandatory to deduct pf in new joining company

    kindly advise point wise.

    Reply
    • Hi,

      Point 1. No, it is not mandatory.
      Point 2. 2 months for withdrawing Pf
      Point 3. Not mandatory, if you sign Form 11 along with declaration addressing to employer that you don’t want to deduct your Pf

      Reply
  6. Hi, my basic salary is 60000/month. And my employer is deducting pf as 7200+7200=14400(employee+employer). is it mandatory to deduct 14400? as i only want to deduct 1800+1800=3600.

    Reply
    • I think it is 720 Rs.
      As per PF rules, 720 should be deducted from your basic wage and another 720 should be added by your employer.

      Reply
  7. MY PRESENT SALARY 14000 PF.DEDUCT IN MY SALARY NOW MY PAYMENT 17000 CAN EMPLOYER EXEMPT PF DEDUCTION IN MY SALARY. MANDATIORY TO DEDUCT MY PF ON 15000 CELING AMOUNT .

    Reply
  8. I am working in probation period for 6 months in a new company and my salary is more than ₹25000. Can I request to new company to deduct pf from my salary and deposit in my PF account without their contribution as I have UAN number ?

    Reply
  9. My basic pay is Rs.15000/-. There is no D.A. But gross salary is Rs.1 lac. Can I opt out of PF scheme, as employer does not contribute to PF but proposes to deduct employers contributuon from my sklary.

    Reply
    • As your basic wage is equal to 15,000 it is mandatory for your employer to deduct and contribute to PF.
      If your basic increases in the future, then you can opt out.
      But remember PF gives a better interest rate (currently 8.5%) than other fixed investment options.
      so it is better to contribute to PF even if the basic salary increases.

      Reply
    • If your basic wage is below 15000 then PF is mandatory.
      If the basic wage is above 15000 Rs then it is not mandatory but you can contribute to PF depending on your employer’s interest.

      Reply
      • My salary is 25000 and I don’t want to deduct the PF. Only deduct the Professional Tax and take home Rs. 24800/-. Is it possible? My Age is 55

        Reply
      • if an employee does not want to deduct pf contribution as his basic is more than 15000 then do employer has to submit any document to PF organisation

        Reply

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