Is the employer liable to deduct epf?

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bhuvana (Querist)
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24 September 2012 Sirs,

Please clarify if the employer is liable to remit EPF in the following case :-
An employee has a gross salary exceeding 6500/- (ceiling for EPF) say 10000/-p.m.
He joins the company only by the last week say on 25.09.12, his salary for the month wud be only Rs. 2000/- or he receives only 2000/- for that month becoz of loss of pay….
The query is-
Is the employer liable to deduct EPF from his salary for that particular month ? ( for rest of the year he wud receive more than the ceiling limit of Rs. 6500/-)

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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24 September 2012 No, the salary for the month is more than Rs. 6500 but due to leave, he has received less amount.
Accordingly, EPF is not applicable.

bhuvana

bhuvana (Querist)
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16 January 2013 pls ji, can i get any ref for this, our consultant is insisting us to register one such employee and is holding back the filing for the month of Dec 12.

And also pls let me know what salary shud i enter for that employee for that month while filing return online?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 In the scenario you’ve described, where an employee's salary for a particular month is below the EPF wage ceiling limit of ₹6,500, and the employee will earn above this limit for the rest of the year, here’s how the EPF obligations generally work:

### EPF Contribution Obligations

1. **Salary Below the Ceiling Limit**:
- **EPF Contribution**: According to the EPF rules, if an employee's salary for a particular month is below the EPF ceiling limit of ₹6,500, EPF contributions are generally not required for that month. Since the employee's salary for that specific month is ₹2,000 (which is below ₹6,500), EPF contributions are not mandatory for that month.

2. **Employee's Annual Salary Consideration**:
- **For Subsequent Months**: If the employee's salary for the rest of the year exceeds ₹6,500, then EPF contributions should be made on the entire salary for those months. The ceiling limit of ₹6,500 is not applicable if the salary exceeds this amount in the future months.

3. **Reporting for the Month**:
- **Salary for EPF Filing**: When filing the EPF return for the month of September 2012 (or any month where the salary is below the ceiling limit), you should report the actual salary paid. In this case, for September, you would report ₹2,000 as the salary paid to the employee.

### Reference to EPF Rules:

- **EPF Ceiling Limit**: As per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, if an employee's salary exceeds ₹6,500, the contributions are made on the actual salary exceeding the ceiling limit, if the employer chooses to contribute beyond the ceiling.

- **Circulars/Notifications**: The Employees' Provident Fund Organisation (EPFO) periodically issues circulars and notifications regarding the EPF contributions and ceiling limits. For specific queries and clarifications, referring to the latest EPFO circulars or contacting EPFO directly can be beneficial.

### Practical Steps:

1. **For September 2012**: Since the employee’s salary for September is ₹2,000 (below the ceiling), you are not required to deduct EPF for that month.

2. **For Subsequent Months**: You should continue to make EPF contributions for the months when the employee’s salary exceeds ₹6,500.

3. **Filing EPF Returns**: Enter the salary of ₹2,000 for September 2012 in the EPF return for that month. Ensure to make the EPF contributions based on the actual salary for the months when the salary exceeds the ceiling.

### Conclusion:

Your consultant’s insistence on registering the employee for EPF for September when the salary is below the ceiling might not be required according to the standard EPF rules. It’s important to adhere to the ceiling limits and ensure compliance based on the actual salary paid.

For detailed guidance and any legal clarifications, you might want to consult the EPFO guidelines directly or seek professional advice from an EPF consultant.