Pf deduction / bonus of new employee with basic > 10,000

If we induct a new employee with basic > Rs.10,000, do I have to deduct the PF and also add employer share? Is it also necessary to give bonus?

Asking this question as we want to induct a family member for short time (2-3 years) and he is not interested in PF/Bonus.

I assume we would still need to deduct professional tax.

Please advice.

Replies (4)

Buddy,

 

Provident Fund (PF) is common for employees. Whether he/she earns 1000 or in Lacs PF has to be deducted. It is a LAW.

 

PF is not calculated according to greater or lesser Basic pay. But, 12% (standard rate) is deducted from Basic+DA (Dearness Allowance).

 

"Bonus" is under the discretion of the management to give or not and it is not compulsory as per law. 

 

Then I do not understand what do you mean by "Employee Share".

 

PF is compulsory and no one can avoid it. Even if he/she is a contract or full time employee, why even Chairman of a company, PF has to be deducted from their salary. Whether your family member is interested or not PF has to be deducted.

 

Yes. Professional Tax (PT) would be deducted and it is according to the state in which the person is employed as it is a state revenue which is non-refundable. There is slab for it were salary drawn after deduction crosses Rs.20,000/- (This is the slab in Tamilnadu) PT will be deducted and it is for every 6 months.

 

 

 

Dear shankar i want to ask you what is applicability of EPF and misc. Provision act 1952???? Act doesnot have any validity?, as this act specify wages limit

Dear Ankit,

 

The Applicability of EPF: 

1) Every establishment which is factory engaged in any insdustry specified in schedule 1 and in which 20 or more persons are employed.

2) Any other establishments employing 20 or more persons which Central Government (CG) may, by notification, specify in this behalf.

3) Any establishment employing even less than 20 persons can be covered voluntarily under section 1 (4) of the Act.

 

upto 6500 of salary and persons who are members under PF act , the company has to deduct PF @ 12% from the salary of the employee with a celling limit of 6500 and the company should contribute 12% of the salary, 

But if the employee is new entrant to the PF scheme and his salary exceeds 10000, then he does not covers under pf act, the deduction from the salary is depends upon the employer - employee understanding

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