Employee Provident fund Applicability
I want to know when PF act applies to an organization. Please state the limit wrt no of employees & the salary limit. Also give salary break up.
Also state how to calculate PF. If you have any format also it will be helpful.
Any establishments having 20 or more employees should get the PF registration. PF is to be compulsory deducted if salary of the employee is 10,000 or more. PF will be deducted on basic salary.
However the maximum basic salary upto which employer should compulsory pay is 6500.
- Applicable to all establishments ( covered under Sch I of EPF Act ) and also establishments carrying notified activities where 20 or more persons are employed
- For Cinema Theatres- 5 or more persons employed
- Whole of India except J&K
- The establishment to which this Act applies shall continue to be governed by this Act , even if the number of employees falls below 20 at a later date.
PF is calculated at 12% on Basic + DA. However, where such Basic+DA exceeds RS 6500, we may restrict it Rs 6500 and contribute 12% i.e Rs 780 per month each from employer & employee side.
If your Basic + DA is below Rs 6500, but Gross Pay exceeds Rs 6500, it is a healthy & accepted practice to contibute PF based on such
gross pay or Rs 6500 , as per your convinience, to avoid future litigations.
But PF is compulsory only if salary is more than 9999. Please correct if i am wrong.
May be you are talking about Karnataka Professional tax where the Minimum slab limit is 10K
For PT minimum slab is 10500. I read somewhere that if salary is 10,000 or more then PF is compulsory?
In karnataka, PT slab limit is like this
Gross salary < Rs 10,000 - PT not deductible
Rs 10000 to Rs 14999 - Rs 150 pm
Rs 15000 and above - Rs 200 pm
PF is 12% on Basic + DA ( exception :- If Salary itself is below Minimum wages , then Minimum wages will be considered as Basic + DA)
Rs 6500 is considered as PF salary for PF contribution.
Whatever you have read and heard about PF & PT till now is totally incorrect.