PF deduction as per new wage code - Can we still have a capping of 15000 basic salaries with 12% PF deduction?

Hello everyone,

Under the new wage code which will be applicable from April 2021, are the PF rules the same as the earlier ones? Can we still have a capping of ₹15,000 basic salary with 12% PF deduction, or have the rules changed as per the new wage code? Please guide me on this.

Hi HR,

The PF rules remain the same, maintaining a capping of 15000. However, the department will monitor the records of employees who receive gross wages below 15000/- to ensure that the difference between gross wages and EPF wages paid is based on genuine facts. If discrepancies are found, they will request contributions for that portion of payment.

The new wages code impacts more than just PF; its overall effect will be on annual income tax (TDS), potentially leading to many allowances becoming taxable. Additionally, terminal benefits such as gratuity and EL encashment will be higher for employees.

Thank you.

Hello everyone,

Could you kindly advise if an employee can opt out of the Provident Fund (PF) if their basic salary increases beyond 15,000? This question pertains to an employee who is currently a PF member.

If he is currently a PF member, and if his salary is increased beyond Rs. 15,000/-, his contribution (including employer's) towards PF shall continue to be made as if his salary is Rs. 15,000/-.

In current employment, he/she cannot opt out from PF.

New wage code has been introduced for updating changes in the pay structures and has no concern with PF contributions. The capping continues to be 12% of gross wages (excluding HRA and standard allowances) up to 1800 per month.

Hello dear,

My gross salary is 24,840. Could you please let me know what my PF deduction is? Your help is greatly appreciated. Thank you.