Employees whose monthly salary (basic wage + dearness allowances) is 15000 or below are eligible for the EPF scheme. For employees whose salary is above 15000 then the PF contribution is calculated up to 15000 only. 

If employee wants to contribute more amount then he can contribute under voluntary PF contribution, but employer doesn’t have any obligation to calculate PF contribution on increased salary.

If the salary ( basic wage + DA) of an employee is 15000 from the starting date of his joining then it is not mandatory to deduct PF from his salary.

If the employee salary increases to above 15000 due to salary hike and if he is previously an EPF member then he should continue making PF contribution. And the PF is calculated on 15000 only.

For more details read this topic on Is It Mandatory to Deduct PF from Salary More than 15000

To calculate PF of basic salary of more than 15000 Rs follow the below calculation process. Here I have taken an example of an employee whose basic wage + DA is 18000 Rs. Lets see how PF is calculated on 18000.

If that employee wants to pay a voluntary PF contribution then the calculation will be like this. (Here employee contribution is calculated on 18000 and employer contribution is calculated on 15000)

In the above salary example, employee PF contribution is calculated on 18000 but employer pension contribution is calculated on 15000 (ceiling wage limit).

And employer PF contribution = (Employee PF contribution – Employer PF contribution)

⟣ Here we are not considering 3.67% calculation of employer PF contribution.

Note: When you use ECR excel it will be calculated automatically. We just need to enter the basic salary of the employee.

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