Provident fund
This query is : Resolved
07 March 2013
Can a company deduct PF on the basic wages of employees having basic wages more than Rs 6500 pm. My co. is deducting PF of all the employees. Employees do not have any objection as it is beneficial for them but is it a loss for the co. or not. Please tell me whether the co. should do it or not.Is it a offence or loss fo the company????
07 March 2013
Though it is not mandatory but both Employer & employees can contribute towards provident fund if they wish to do so. It is not an offence.
Yes, it is additional cost for the company as you contribute 12% of employee’s salary.
Please note if basic salary of an employee was less than 6500 and he was contributing towards PF earlier, you can not terminate his membership even his basic salary has exceeded 6500 at any later stage. Of course, both employer & employee contribution can be restricted on 6500 in such cases.
Yes, it is additional cost for the company as you contribute 12% of employee’s salary.
Please note if basic salary of an employee was less than 6500 and he was contributing towards PF earlier, you can not terminate his membership even his basic salary has exceeded 6500 at any later stage. Of course, both employer & employee contribution can be restricted on 6500 in such cases.
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