The Employees’ Provident Fund Organisation (EPFO) has clarified the rules regarding mandatory Provident Fund (PF) contributions for employees earning above ₹15,000. Many salaried individuals are confused about whether they must join the EPF scheme if their basic salary plus Dearness Allowance (DA) exceeds this threshold.

Key Clarifications by EPFO

Mandatory PF Applicability:

PF is mandatory for employees whose basic salary plus DA is ₹15,000 or less.

For employees earning more than ₹15,000, joining EPF is optional, but employers may offer voluntary participation.

Voluntary Provident Fund (VPF):

Employees earning above ₹15,000 can voluntarily contribute to the PF through VPF.

VPF offers the same benefits as EPF, including tax exemptions under Section 80C and retirement savings.

Employer’s Role:

Employers are not required to deduct PF for employees earning above ₹15,000 unless the employee opts in voluntarily.

Employees should submit a written request to join the PF scheme if they wish to contribute voluntarily.

Benefits of Joining EPF/VPF Voluntarily:

Long-term retirement savings.

Interest accrual on contributions.

Tax benefits and financial security.

Conclusion

While PF is not mandatory for employees earning more than ₹15,000, it is highly recommended to consider voluntary participation through VPF for retirement planning and tax benefits. The EPFO’s clarification helps employees make informed decisions about joining the provident fund scheme.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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Balasahana Suresh

14/12/2025 08:03 AM