Employees Provident Fund

This query is : Resolved

Lalit Soman (Querist)
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02 June 2009 Dear All:

As per the EPF laws, if the employee contributes 12% of BAsic towards PF, then the employer also contributes 12%. But can the organisation cut 13.61% from the employee's salary (12% +1.61% Administrative charges)as employer's contribution from the empoyee's salary if its a part of the CTC. My query is regarding the 1.61% administrative charges whic the organisation is responsible to pay, to what extent it is justifiable. Is it mentioned anywhere in the EPF act.

Thank you in advance.

Lalit Soman

M Prabhakar Menon

M Prabhakar Menon (Expert)
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02 June 2009 Please go through the provisions of the Employees Provident Fund Act and Rules The 1.61% is the administrative charges which has to be borne by the employer It is calculated on the amount on which PF amount is calculated This payment is treated as an expenditure for Income Tax purposes in the hands of the employer The employer's share has to be equal to the employees' share so you can ask for the employer's share of 1.61%