Opt-Out Option in PF

Updated On Jun 24, 2021 8:30 AM

Bigger take-home pay and Investment opportunity. Opting out of provident fund will result in more take-home pay, and hence more disposable income and investment opportunities that can potentially lead to greater returns. Here’s the process to opt out, and the pros and cons of exiting PF.

Table of Contents:

How does it work?
Provident fund applicability
When can an employee opt out of the provident fund?
Provident fund opt out procedure
The Benefit of opting out of Provident Fund for an Employee

Employee Provident Fund or EPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 that offers retirement as well as other benefits to the salaried class employees of the country.

How does it work?

This scheme is meant for building the retirement corpus for the employees and serves as a good investment option too. The employees can contribute 12% (up to 88%) of their PF wages towards Voluntary PF and the employer matches it with a contribution which is not more than 12%.

At the time of retirement, the employee is entitled to receive a pension and a lump sum amount which includes contributions over the years and the interest accrued thereon.

Provident fund applicability

Any organisation that has 20 or more employees is liable to maintain a provident fund account for its employees. There is no limit to the employees’ contribution to PF, he can contribute up to 100% of his Basic + DA (PF Wages) towards PF, but it must be a minimum of 12 per cent of the same.

However, if your employee draws a salary more than Rs.15,000 per month, then he/she can also choose to not contribute to the Provident Fund. This is possible only if he meets certain criteria.

For example, if a person moves overseas pursuing new employment there, then he is not obliged to contribute to EPF in India, and he can choose to opt out of PF. However, there are two other scenarios where he may need to contribute.

If the employee is deputed overseas to a country with which India has a bilateral Social Security Agreement, he can obtain a Certificate of Coverage (CoC) from EPF authorities and avail exemption from contribution towards host country Social Security Scheme.

There are 18 countries with which India has entered into an SSA, for all remaining countries, as long as the person receives a salary in India, he is obligated to contribute to both Indian EPF as well as to the host country’s Social Security Scheme.

When can an employee opt out of the provident fund?

An employee can opt out of the provident fund if the following criteria are met:

If he/she is a first-time employee i.e., at the time of joining the first job
The employee has his or her Basic + DA (PF Wages) more than Rs.15000/- per month
At the time of changing a job, only when he/she does not have an existing PF account number

Provident fund opt out procedure

If an employee wants to opt out of PF, he can fill out Form 11 at the time of joining his first job. He will also have to present a letter addressing the employer stating that he wishes to opt out of the Provident Fund Scheme. However, the option to opt out will cease to exist in the event of making even a single contribution to PF.

The benefit of opting out of provident fund for an employee

While opting out of PF contributions will temporarily give you more disposable income, experts do not recommend this based on what an employee will lose by not opting for PF:

Missing out on employer share of contribution
Missing out the interest on accumulated PF, which is 8.55% (2018- 2019) on the provident fund amount, which is significantly more than the interest rate of bank deposits.
The contributions to PF are eligible for tax deductions under section Section 80C.
The employee will miss out on the retirement pension under the Employees’ Pension Scheme (EPS).
The employee will also miss out on the Insurance benefit (up to INR 6,00,000) that is covered under the EDLI Scheme — in case of accidental death during service before retirement — provided by EPFO. This benefit can also be availed by the employee’s nominee.
The employee will not receive a lump sum amount on retirement.
The employee will not have the option to take an emergency loan on the PF amount.
Will not have the option of premature withdrawal of PF in case of unemployment or loss of income during medical emergencies.

FAQs on Opt-out option in PF

1. What if I choose not to participate in PF?

If we do not already possess PF bank details, we can choose to opt out of EPF. We could choose to not contribute to EPF if we have never contributed to it before. Individuals who prefer opting out of EPF payments will still get their entire income with no adjustments for provident funds.

2. Is it required to choose PF?

If we work for a company that hires more than 20 employees, we must participate in the EPF plan. If the company employs fewer than 20 employees, we can still enroll in the plan.

3. What is the procedure for opting out from EPS?

The EPS payment can be taken only after the individual has left the firm and before starting a new job. They can collect the EPS payment by submitting Form 10C to any EPFO site. To collect the EPS sum online, the worker should have a current UAN, as well as the KYC data, which must be connected to their UAN.

Related Articles on EPF

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Comments

Sumit Kumar
Hi sir Can u please suggest me that if I don’t want to contribute in pension fund of PF while making contribution in provident fund , my employer is saying that some percentage of my employer’s fund to be transferred to pension fund , if I don’t want to be transferred into such fund then what are the step to be taken ,
Apr 20, 2020 at 12:25 pm
Reply
Rishabh Ranjan
Hi Sumit,
According to Employees’ Provident Funds and Miscellaneous Provisions Act, an employer must direct 8.3% of the employer contribution towards the Employee Provident Fund and the remaining 3.7% towards your pension fund.
Apr 22, 2020 at 6:26 am
Reply
Samarth
Sir can you please help me know i have completed 5 years of EPF dormant account since 2015 all my employers did not pay EFP . can you please suggest how do i remove this . can you suggest any better way where i can contribute both share ?
May 15, 2020 at 3:20 pm
Reply
Rishabh Ranjan
Hi Samarth,
Dormant Account means where the contribution stopped to employees PF account due to leaft service and employee is not withdrawn or transferred the accumuations from it. Such accounts still yield interest and emplyees can either withdraw the PF accumulations or can transer it to employees UAN by submitting either online transfer form or trasfer form. know more about how to withdraw pf.
May 20, 2020 at 12:08 pm
Reply
BIJAY
HI , THIS IS BIJAY KUMAR BARIK, MY PREVIOUS ORGANISATION F.Y 2013-2016 THEY ONLY REMIT EMPLOYEE CONT., EMPLOYER CONT. IS STILL PENDING .
WHAT SHALL I DO TO CLAIM MY FULL PF MONEY. PLEASE SUGGEST.
Jun 22, 2020 at 5:13 am
Reply
1. Rishabh Ranjan
  Hi Bijay,
  You need to contact the employer to know the status of employer PF contributions. Post the remittance made by them, you can claim the complete PF dues. Alternatively, you can raise a Grievance in PF portal where EPFO will take necessary action against the employer in order to collect the employer’s contribution dues.
  Jul 1, 2020 at 9:10 am
  Reply
Sura
Hi Rishabh,
I have a total of 6+ years of experience of which I have contributed to 5+ years to PF but not continuously. There is a break of 8 months in b/w where I worked for a startup, which did not contribute to EPF. However, I have all the other proofs (payslips, form-16) of continuous active employment for 6+ years. Can I withdraw my PF taxfree?
Jul 24, 2020 at 4:01 am
Reply
1. Rishabh Ranjan
  Hi Sura,
  On the basis of the D O J and D O L the service for which employees want to withdraw PF, TDS will not be deducted by EPFO if the contribution is 5 years and above.
  Jul 30, 2020 at 12:55 pm
  Reply
Swapnil
Hi, I m a Contractor and I hired labour only when I get some work contract from the PWD Department. I pay to employee only in the month contract is alloted to me and not on reqular basis.. Further every time there are different different labour’s.
Please guide me how to show this in PF return
Jul 25, 2020 at 3:56 pm
Reply
1. Rishabh Ranjan
  Hi Swapnil,
  For the payment made to employees you need to file the returns. Furthermore, you need to report employees’ last working day if they are no longer employed by you.
  Jul 30, 2020 at 12:52 pm
  Reply
Maya
Hi, I was working as an Indian employment (10+ years) and less than 58 age, but I am now permanently overseas and have become an overseas employee, with no salary component in India.
So do I still need to mandatory opt for Scheme Certificate as I plan to withdraw my full PF?
Maya
Jul 28, 2020 at 4:14 pm
Reply
1. Rishabh Ranjan
  Hi Maya,
  Since you have 10+ years of service, you’re entitled to pension benefits. Since you have permanently moved overseas, you can withdraw full PF accumulations with interest. To receive the pension, you need to opt for a scheme certificate.
  Jul 30, 2020 at 12:42 pm
  Reply
Amal
I am planning to take a long leave of 6 months from my job. What will happen to the PF contributions? Will the employer pay or will there be a break??
Aug 8, 2020 at 8:29 pm
Reply
1. Rishabh Ranjan
  Hi Amal,
  PF contributions are made on the basis of the employee’s earned salary. Monthly PF contributions will only continue as long as the employee receives monthly salary.
  Aug 20, 2020 at 9:50 am
  Reply
Sadhu Charan Naik
Sir,how to correct my Date of Exit & Date of joining.
Sep 4, 2020 at 12:23 pm
Reply
1. Rishabh Ranjan
  Hi Sadhu,
  In case the issue is with regard to the Date of joining and exit then a joint declaration form needs to be submitted to the current employer for corrections on the PF portal which will enable you to apply for an online PF transfer.
  Sep 16, 2020 at 9:11 am
  Reply
Soorya
Hi sir how to cancel pension and of pf money..pls reply urgent
Sep 15, 2020 at 6:27 pm
Reply
1. Rishabh Ranjan
  Hi Soorya,
  Once a request is submitted online it cannot be cancelled. Only an EPFO authority can reject the application. You can visit the respective PF office and meet the concerned case worker for the rejection of claim form.
  Sep 23, 2020 at 8:25 am
  Reply
Gaurav
Hi Sir,
I have joined a company and it’s been 4 months and I want to opt out of PF due to my personal commitments and the amount of PF gets deducted from salary that is CTC so 1800( Employer and 1800 employee both get deducted from my salary per month and come and it’s not possible to save anything in hand. I request to guide me how can I opt out of this and I have no one to tell this. Please advise
Oct 2, 2020 at 3:54 pm
Reply
1. Rishabh Ranjan
  Hi Gaurav,
  According to the EPFO, “A member of the Fund shall continue to be a member until he withdraws his complete PF and Pension dues”. Therefore, you need to continue the PF contribution as long as you’re working at the company.
  Oct 29, 2020 at 6:40 am
  Reply
Prakash Sunki
Sir, I am 65 years old and have worked in private company about 6 years after6 months retirement from my previous company. I have resigned from the present company last year October month. My employer has settled all my PF account and cleared everything. But I am unable to transfer the EPF amount to my Bank to claim from the EPF unified portal. I am getting my registered aadhar OTP in the last stage, when the OTP was filled in the OTP validation and sent the OTP number, it was not validating the OTP ,it is just stopping. I have been trying this 4 to 5 times everyday for the last couple of weeks. Kindly advise, what is to be done to get this on line claim process.
Oct 7, 2020 at 2:15 pm
Reply
1. Rishabh Ranjan
  Hi Harshala,
  Without updating Aadhaar (which is a part of KYC) you cannot claim any PF dues online. You can upload KYC details by logging into the EPFO portal with your UAN and password, and by sending a screenshot of the completed KYC to the employer for a Digital Signature Certificate (DSC) approval.
  Oct 29, 2020 at 6:20 am
  Reply
Arun
Hi
If we hire an employee at 40000/- salary but he has an existing UAN, what is my liability towards PF.
Oct 23, 2020 at 10:00 am
Reply
1. Rishabh Ranjan
  Hi Arun,
  EPF contributions for both employee and employer is calculated on the basis of your BASIC+DA i.e. 12% of BASIC + DA. This amount (BASIC + DA) is capped at INR 15,000. In other words, if your BASIC + DA exceeds INR 15,000, the maximum EPF contribution will not exceed INR 1,250. However, if your BASIC + DA falls below INR 15,000 then the capping doesn’t apply and the contributions are calculated accordingly.
  Of the 12% contributed by the employer, 8.33% of BASIC + DA is diverted towards PF and the remaining 3.67% goes towards EPS.
  Please follow the aforementioned mode of calculation, check your monthly contributions, and report discrepancies (if any) to your employer.
  Nov 5, 2020 at 6:41 am
  Reply
vinit shah
hello –
i am an employer having less than 10 employees but to picka work order of a client its a “norm” to be having registered to pf and esic, however when i spoke to my employees no one is ready to allow any deductions from their salaries. All employees are above 15000 a month.
I have already registered to PF ESIC , what shoul i do???
Nov 3, 2020 at 4:03 am
Reply
1. Rishabh Ranjan
  Hi Vinit,
  Speaking of ESI, considering that you have contract employees such as security and housekeeping, then there will be 10 or more employees. For this reason, your establishment needs to be covered under ESI.
  As for PF, there are two ways you can go about it. First, your establishment needs at least 20 employees to cover them under PF. You can also opt for Voluntary PF Coverage if employees are interested in PF Contribution.
  In the above case, since you already registered under PF and ESI, then you need to meet the monthly compliance as per the Act.
  Dec 1, 2020 at 8:09 am
  Reply
Nootan
Hi Rishab,
I was unemployed for 3 months and have withdrawn my FULL PF amount. Now I got a new job in another company.
Since
— I have already withdrawn my FULL PF amount.
— And my Basic Salary in the new company I have joined is more than Rs.15,000/-
Can I opt out of PF contribution ??? please reply.
Nov 8, 2020 at 4:14 am
Reply
1. Rishabh Ranjan
  Hi Nootan,
  Since you were not a member of PF at the time of joining the company, you can opt out of PF (if your PF wages is above INR 15,000).
  Dec 10, 2020 at 9:06 am
  Reply
Aasif
Hello Sir,
On my first job i had opened pf account and that time my basic salary was 13000/- so i was contributing 1250 to eps. But now i am changing my company where my basic salary is more than 15000 so is it compulsory for me to contribute to epf and eps ?
Eagerly waiting for your answer.
Nov 13, 2020 at 9:53 pm
Reply
1. Rishabh Ranjan
  Hi Aasif,
  Yes, once you become an EPS member, you need to continue with the EPS contributions. However, EPS will be deducted on the basis of the capping i.e.INR 15,000.
  Dec 10, 2020 at 9:01 am
  Reply
Hema Kumar S M
An employee got retired from an organisation.
Now want to take it into employment. But he is not interested to make PF contribution. Whether we can get exception for this person by not remmiting to PF?
Any method is there to opt out of PF / not getting into PF contribution for a retired employee
Nov 17, 2020 at 11:09 am
Reply
1. Rishabh Ranjan
  Hi Hema,
  Since the employee has retired, and if his basic wages is above INR 15,000 he can be excluded from PF membership by submitting PF Declaration form (Form 11).
  Dec 10, 2020 at 8:49 am
  Reply
Anil
Thanks for the post!
1. Please share the source of opt out option in EPF scheme.
Please mention as per the following document link:https://www.epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPFAct1952.pdf
2. Does the employer has the right to disregard an incoming employee’s wish to opt-pot of the EPF scheme?
Nov 17, 2020 at 4:44 pm
Reply
1. Rishabh Ranjan
  Hi Anil,
  1. Please refer to the following document released by the EPFO to know more about the opt-out option under EPF.
  2. Yes, if the employee isn’t meeting the conditions such as:
  – PF wages not more than INR 15000
  – Employee already enrolled as a PF member etc.
  Dec 10, 2020 at 9:16 am
  Reply
Mohan ram
Hi sir, if employer and employee is not interested to pay PF but they need ESI.. also employees submitting form11 and self declaration form.. is it possible?
Nov 20, 2020 at 6:46 am
Reply
1. Rishabh Ranjan
  Hi Mohan,
  PF contribution is not based on the interest of the employee and the employer. Once the establishment employs 20 or more employees it is mandatory to cover the establishment under PF.
  As for the contributions, those employees who draw Basic/DA less than INR 15,000 need to be covered under PF. Employees who draw Basic/DA above INR 15,000 can opt out of PF, provided that the said employees are first-time employees.
  Dec 10, 2020 at 9:14 am
  Reply
Rahul
Hi, I had opted out of epf when I joined my job 3 years ago (this was my first job)
Now I want to join epf with current employer ( no change of job ).
1. Is it possible to do this? I asked the HR of my company and still no response.
2. Is there any specific rule that prevents me joining epf after opt out ?
Nov 21, 2020 at 2:39 pm
Reply
1. Rishabh Ranjan
  Hi Rahul,
  You can opt for PF by submitting a written request to his employer stating the reason for the initial opt out. Once the employer approves, your date of joining EPF scheme will differ from the actual date of joining. (Actual date of joining will be considered for all employment benefits).
  Dec 10, 2020 at 9:13 am
  Reply
kumar
HI rishab
Good day to you..It is nice to see you replying all form of queries…thank you
Me too have one query ..could you please kindly help me out..
am not in job for some months,,Previously had two PF accounts with 2 companies (against single UAN)..Recently withdrawn all of it using form 19…got approved…also gave form 10c ..in process..
i may join a concern next month ..want to opt out of this EPF & EPS thing..want to increase in hand salary..is it possible to give a request since my basic would be above 15k??..read somewhere PF commissioner can declare excluded employee against employee request..but company seem very strict to deduct EPF…could you please tell me any rules or form, to opt out while joining another company in future…is there any way to get out this EPF mess..thanks in advance..
Dec 2, 2020 at 6:55 am
Reply
1. Rishabh Ranjan
  Hi Kumar,
  Since you’re not an EPF member at the time of joining the new employer and your Basic wage is above INR 15,000, you can opt out of PF by submitting the PF declaration form (Form 11).
  Dec 22, 2020 at 10:49 am
  Reply
Vinit
Hi
Could you please state the section of law that allows a first-time employee to opt out of the scheme?
Dec 2, 2020 at 12:43 pm
Reply
1. Rishabh Ranjan
  Hi Vinit,
  Please refer: Sec 17 of THE EMPLOYEES‟ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952.
  Dec 22, 2020 at 10:50 am
  Reply
Pooja
Hello,
I want to ask two things –
1. As per policy of PF now contribution is calculating on Gross (Except HRA & Attendance Allow.) with the ceiling of 15000/-. so if a new employee wants to opt out from PF scheme and his total gross is 18100/-(including 3000-HRA), then can he opt out from PF bcoz we can see his gross will be more than 15000 after deduction of HRA ?
2. I saw form no 11 but where no any option is given for opt out of PF.
please suggest.
Thanks..
Dec 4, 2020 at 6:28 am
Reply
1. Rishabh Ranjan
  Hi Pooja,
  1. Employee’s PF wage (not on gross wages) should be above INR 15,000 in order to be excluded from PF.
  2. Please refer to Sl.No. 7 & 8 which asks ‘Whether earlier a member of EPF/EPS – Yes/No’.
  Dec 22, 2020 at 10:52 am
  Reply
Vishal Garg
Hello Sir,
Thanks for this article.
Suppose i am joining a new company above 15000 Salary , and i earlier had PF contributions , So is it necessary to withdraw EPS pension fund also in order to be a excluded member.
and
what if I have a scheme Certificate of 10 years of service ?
Dec 29, 2020 at 5:38 am
Reply
1. Rishabh Ranjan
  Hi Vishal,
  Once you become an EPF and EPS member, you need to continue the membership, even at the time of joining service under the new employer.
  At the time of joining if you are not a member of EPF and EPS (or claimed the PF and Pension dues) then you can be excluded from EPF and EPS membership.
  Jan 25, 2021 at 10:28 am
  Reply
Shilpa Mani
Hello,
We are an Establishment with less than 10 Employees. All employees are drawing more than PF Wage of Rs.15,000. Hence we are not registered into EPFO. A new Employee with salary of more than Rs50,000 wants to contribute PF. He has is own UAN number. Is there any way where he can contribute into his EPF without Company in picture.
Jan 9, 2021 at 5:50 pm
Reply
1. Rishabh Ranjan
  Hi Shilpa,
  An establishment should have a minimum of 20 employees for PF Coverage. Without employer’s PF coverage, an employee cannot contribute towards EPF.
  Jan 25, 2021 at 10:40 am
  Reply
Anoop
Dear Sir,
We have hired contract employee for three months on an hourly rate basis. He was a member of EPF in his previous employment but doesn’t want to contribute to EPF for this limited period hourly rate based contract employment. Our organisation though registered with EPF has less than 5 employees at present being a start-up. Please advise on our legal obligations towards deducting EPF contribution from the hourly rates payable to the contract employee.
Feb 2, 2021 at 5:42 am
Reply
1. Rishabh Ranjan
  Hi Anoop,
  Although you were a part of PF in his earlier employment, you won’t be under the current employer as they are not covered under EPF for the very fact that the employee count is 5 which falls below the mandated threshold count of 20 — a prerequisite for PF coverage. Your current employer can process your salary without PF deductions, but once they attain 20 or more employees they can register for PF and start covering all employees under the PF scheme.
  Feb 17, 2021 at 7:10 am
  Reply
Mitali Medhi
Hi, Is it possible to hire employees on fixed contract with out PF and ESI, If yes then what is the procedure. Apart from that if any employees take home is less then minimum wage then what is the process of calculating basic wage for PF.. for example if any employees salary is 7k (which is less then minimum wage) then what will be his basic salary..
Feb 2, 2021 at 2:09 pm
Reply
1. Rishabh Ranjan
  Hi Mitali,
  While hiring employees on a fixed contract, PF and ESI are mandatory. It can only be excluded when the employee’s basic wage is above INR 15,000 and Gross wage is above INR 21,000.
  When the employee’s salary is less than the minimum wages ie., INR 7,000, PF needs to be deducted on the basis of INR 7,000.
  Feb 17, 2021 at 7:10 am
  Reply
Dolly
Hi Rishabh,
Can you please share the PF clause number stating the Opt out option for employees?
Thank you.
Feb 19, 2021 at 1:14 pm
Reply
1. Rishabh Ranjan
  Hi Dolly,
  You can refer to the PF declaration form (Form 11).
  Mar 22, 2021 at 8:23 am
  Reply
Harsha
Sir
If a person has Rs.15100 of gross wages is he eligable for EPF
Mar 1, 2021 at 6:33 am
Reply
1. Rishabh Ranjan
  Hi Harsha,
  Yes, the employee is eligible for PF as PF is deducted on the basis of the employee’s Basic/DA. For other allowances, it is less than INR 15,000.
  Mar 22, 2021 at 8:27 am
  Reply
Pradeep
Hi,
We have office In Bangalore and paying 12% of Basic of employees and Rs.1800/- employer contribution. If we open branch office in Chennai can we opt for 12% of employee and 12% employer contribution on basic.
Mar 3, 2021 at 8:50 am
Reply
1. Rishabh Ranjan
  Hi Pradeep,
  Yes, you can.
  Apr 12, 2021 at 8:34 am
  Reply
Vipul Mehta
Hello Rishabh,
I want to ask that if I opted out from EPF scheme while joining my company, but now I want to start it. So, can my employer deduct his portion of PF from my salary by giving reason that previously you not opted so we gave you more salary and now employer portion will be deducted from salary?
Mar 7, 2021 at 3:32 pm
Reply
1. Rishabh Ranjan
  Hi Vipul,
  By submitting a written request to the employer, you can become a member of the EPF and start contributing towards PF.
  Apr 12, 2021 at 8:38 am
  Reply
AM
Hi
I hire some casual worker and process some work on piece meal basis.
As being a principal employer what is our PF liability. Also labour getting changed almost every day. So it’s a huge volume of labour changes.
Further guide me pf deduction on leave encashment
Mar 19, 2021 at 4:33 pm
Reply
1. Rishabh Ranjan
  Hi AM,
  Being the principal employer, if you have more than 20 employees (both direct and indirect employees) your establishment needs to be covered under PF. Once an employee is engaged, employees need to be covered under PF from day one of joining. Leave encashment will not attract PF deductions.
  Apr 22, 2021 at 6:59 am
  Reply
JATIN
MY EMPLOYER HAD FILL-UP WRONG MOBILE NUMBER & MY NAME AND THATS WHY I CAN’T OPEN MY ACCOUNT FOR ANY PROCESS.I FILL UP JOINT DECLARATION FORM FOR CORRECTION BUT AFTER 2 MONTHS THEY ARE NOT CORRECTED ANYTHING.WHAT SHOULD I DO.
Mar 24, 2021 at 9:20 am
Reply
1. Rishabh Ranjan
  Hi Jatin,
  By submitting the Joint Declaration acknowledgement you can visit the concerned PF office in person and meet the caseworker to initiate the correction in PF records.
  Apr 22, 2021 at 7:18 am
  Reply
Riddhi sondigala
Hello sir
I have my pf Account with 2 organisation ,from the second one i had work only for the 20 days due to personal issues,so there is no contribution in my second , but my one organisation their is contribution amount i want to withdraw that,but due to 2nd one I’m unable to withdraw ,can you please tell me how close from 2nd Organisation
Apr 23, 2021 at 2:49 pm
Reply
1. Rishabh Ranjan
  Hi Riddhi,
  You need to contact your second employer to close the account as your old UAN is tagged to their employer code.
  The other option available is to submit the PF/pension claim form manually at the first employer’s PF office to claim PF and Pension dues.
  Jun 18, 2021 at 8:34 am
  Reply
AJ
Can employee change his PF contribution from 12% at actual to minimum limit of 1800 p.m. What formalities to be done.
Appointment letter mention INR XXX as 12% employer contribution. is employer liable to continue such amount or can reduce to minimum 1800 with employee consent?
May 1, 2021 at 6:20 am
Reply
1. Rishabh Ranjan
  Hi AJ,
  It depends on the company policy. I suggest you continue 12% on PF wages as the EPFO provides a good rate of interest.
  If you still want to reduce it to INR 1800, you can approach the concerned employer.
  Jun 18, 2021 at 8:36 am
  Reply
Raj Singh
Hi,
My organization now gonna implement EPF from this financial year. But I don’t want to be part of it.
So I am curious to know under which clause/section/subsection does these details I can find.
When can an employee opt out of the provident fund?
I tried my best but didn’t locate the exact document/para e.t.c.
“An employee can opt out of the provident fund if the following criteria are met:
If he/she is a first-time employee i.e., at the time of joining the first job
The employee has his or her Basic + DA (PF Wages) more than Rs.15000/- per month
At the time of changing a job, only when he/she does not have an existing PF account number “
May 8, 2021 at 9:05 pm
Reply
1. Rishabh Ranjan
  Hi Raj,
  You need to refer EPS scheme under Sec 2 (f) which states that “excluded employee” means:
  (i) an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the Fund under clause (a) or (c) of sub-paragraph (1) of paragraph 69;
  (ii) an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds [fifteen thousand rupees] per month;
  [‘Pay’ includes basic wages with dearness allowance [retaining allowance (if any) and cash value of food concessions admissible thereon;]
  Jun 18, 2021 at 8:42 am
  Reply
MAHESH DAS
Sir, My question is from the point of view of the employer. Ours is a central government organisation which hires about 50 to 100 manpower on outsource basis through contractors for about a year on standard conditions that EPF, etc shall be payable as per statutory provisions. The EPF etc is paid by contractors and the same amount is reimbursed by our organisation. In other words the liability towards EPF is indirectly incurred by Government.
All the contractual employees, who are on the rolls of contractor who also is registered as employer with EPFO, perform their duties in our government organisation. All are paid salary above above Rs.15000/-.
It is understood that an employee can opt out of EPF if salary is above. But most of our contract staff are EPF members for year and demand EPF contribution by employer. It is understood that employer’s liability to pay EPF is only upto statutory wage ceiling (EPFO Circular dated 3.1.18 whereby instructions issued after Supreme Court Judgement in Marathwada Gramin Bank have been reiterated. In view of all above kindly advise on following:-
1. Are we required to contribute towards EPF (through contractor, as said above) or we at deny contribution since all are paid above Rs.15000/-
2. In case, we are bound to pay since employees are not opting out of EPF Scheme, our maximum liability is Rs.1950 per month (1800 EPF+75 EDLI+75 Admin chefs). However, I read somewhere that in such cases contribution towards EPS only is to be made and as such only 8.33% of the Rs.15000/- (ceiling wages) i.e. Rs.1250/- pm is to be contributed.
Kindly advise. Regards.
May 26, 2021 at 8:13 pm
Reply
1. Rishabh Ranjan
  Hi Mahesh,
  Once you become a member, you need to continue being a member as long as you’re in employment under that particular employer.
  For cases where PF wages is above INR 15000, contribution of employer can be capped at INR 15000. The same can be done for your PF contributions if you submit a request.
  Jun 18, 2021 at 8:54 am
  Reply
Night owl
I joined company in march 2019 during that time HR asked me about EPF contribution so i said yes i wish to contribute but then HR said that employer (company) will not contribute,both will be detected from your salary ,is it possible ??
Jun 1, 2021 at 9:33 pm
Reply
1. Rishabh Ranjan
  Hi Night Owl,
  It’s based on an employee’s CTC.
  Jun 18, 2021 at 8:57 am
  Reply
Abhijit bhavsar
I am an employee working for over 15 years and have collected good pf amount.. Now when I am changing job.. New employeer is not offering pf account and say that they will offer me full salary in hand.. And no pf cutting… Is it good or bad.. I am not able to decide…. Please suggest….
Jun 2, 2021 at 6:07 pm
Reply
1. Rishabh Ranjan
  Hi Abhijit,
  Since you have withdrawn the PF contributions of your previous employment tenure, and since you’re not a PF member currently, if your PF wage with your current employer is above INR 15,000, then you aren’t entitled to PF membership. Although it is good to be part of EPF, it depends on the coverage of your current employer under the EPF Act.
  Jun 18, 2021 at 8:58 am
  Reply
Vijay Virwani
Hi
First of all, Thank you for this platform to put forward our concerns.
If you could help me with; as earlier I had basic of 13,000 and being the eligible employee for PF, my employer used to deduct my PF at 12%.
But now, after appraisal, my Basic crossed 15,000 a month.
So can I ask my employer to opt me out of the scheme, as I really do not wish to contribute towards this (being aware of losing the benefits), as I am in need of money way forward for more important costs.
Is it possible to opt out of the scheme?
If yes, can you help me with: on what criteria I can ask my employer to remove me out of it?
As I have notion, that they will disagree first !
Your early response is appreciated.
My regards
Take your care in these times
Jul 3, 2021 at 1:58 pm
Reply
1. Rishabh Ranjan
  Hi Vijay,
  Once you become a member under EPF, you need to continue being a member under EPF as long as you’re in service under the current employer.
  Aug 16, 2021 at 8:28 am
  Reply
Ashwini K
Hi,
When the employee joined our organization for the first time, we had not deducted their PF contribution. Now they are showing interest and requesting us to include their names in the PF portal. Can we add their name in the middle of their tenure. Please guide us. If NO, please explain in detail.
Need help on priority.
Regards,
Ashwini K
Jul 12, 2021 at 12:36 pm
Reply
1. Rishabh Ranjan
  Hi Ashwini,
  Yes, you can add them under PF by taking consent from employees.
  Aug 16, 2021 at 8:36 am
  Reply
Mohinder Paul
Under what rule the epf contributions can be stopped while in employment?
Jul 20, 2021 at 6:06 am
Reply
1. Rishabh Ranjan
  Hi Mohinder,
  While in employment, the employee or employer cannot stop the PF contributions.
  Sep 7, 2021 at 10:31 am
  Reply
Nishant
Hi Rishabh,
I understood from other comments that an employee can be enrolled in PF even a few months after joining the organisation by making a formal request to the employer. Can you tell which clause mentions this particular part as my employer is not supporting and claiming it is possible only after changing the official joining date (This will reduce my experience period, if I agree).
Also, is it possible to submit backdated PF for the past months that got missed ?
Aug 22, 2021 at 1:35 pm
Reply
1. Rishabh Ranjan
  Hi Nishant,
  You need to enroll under PF from your date of joining(service). In case not enrolled, considering you were excluded employee at the time of joining, you can place a request to your employer to enroll under EPF. In this case, the date of joining in PF will differ from actual datae of joining.
  Sep 7, 2021 at 10:47 am
  Reply
Sonam Borana
Hi Rishabh,
I am part of EPF and EPS. Currently my basic is more than 15000. Can I, after declaring my basic, divert the whole of my amount towards EPF and not EPS as I am not willing to contribute towards EPS and also, my basic is exceeding the requirements.
regards,
Sonam
Mar 25, 2022 at 11:01 am
Reply
1. Rishabh Ranjan
  Hi Sonam,
  If you’ve already been a part of EPS before joining the current company, you need to continue with EPS contributions though the PF wages are above INR 15,000.
  Apr 7, 2022 at 1:17 pm
  Reply
sarina
1. im a contract staff and my organisation stopped pf in 2013 because the salary was increased above then statutary limit of 6500/-. Thereafter in 2016 the organization re implemented pf. now can i get the break period bridged..
2. My colleague who joined the organisation during the period when PF was stopped by the organisation and person quit after 11 months contract job. Now will that person also get due amount from the organisation
Mar 25, 2022 at 5:37 pm
Reply
1. Rishabh Ranjan
  Hi Sarina,
  You will be getting the PF dues for the period of contribution start date to end date i.e., from Date of Joining service to Date of Leaving service in PF.
  Apr 7, 2022 at 1:18 pm
  Reply
Rohan M
Hello Sir,
I worked with one private organisation for one year in 2006-07. That time my salary was 6,500/- (Basic + Site Allowance). That time i was not aware of EPF membership. My the then company HR told me that i can opt out for becoming member. I agreed with them and opt out as i wanted more take home salary that time. Was there any rule in 2006-07 which state that the EPF was optional that time on any authentic document? I am need of such document for proving my experience as my current employer is saying that you were not a member of EPF while working with that organisation in 2006-07 means your experience is fake. I submitted them the bank account details where salary was credited but they raising this EPF point only. Hence i need to prove that my experience is not fake just because i am not member of EPF as it was not mandatory during 2006-07 due to wage ceiling is 6,500/-. Kindly help me in this matter. Thank you sir. Kindly correct me if anything wrong in my perception.
Apr 26, 2022 at 3:54 pm
Reply
1. Rishabh Ranjan
  Hi Rohan,
  For work experience, you need to provide the appointment letter, relieving letter, or pay slips.
  Membership towards PF is not a parameter to consider the experience. You can refer to Section 27 of the EPF Scheme to know the details of employees exemption under EPF.
  Jun 22, 2022 at 6:21 pm
  Reply
PRAVEEN
Hi Rishabh,
I had a new joinee freelancer in my organisation and he was not opting for PF and ESI.
My question is in the Form 16
1. Whether earlier a member of Employees’ Provident Fund Scheme, Yes/No , he is a member of EPF Earlier hence should i mention YES ?
2. I Don’t see any option Employee Excemption from EPF ?
3. Declartion BY PRESENT EMPLOYER Section what we need to fill as the section talks about EPF Transfer from his old oraganization to us ,but the employee doesnt want to transfer anything or opt for PF from our organization kindly let us know what to fill in this section
Thanks alot , Awaiting for your revert.
Apr 28, 2022 at 12:55 pm
Reply
1. Rishabh Ranjan
  Hi Praveen,
  If the said freelancer enrolled as a consultant or on a retainer, the person will not be covered under any statues such as PF, ESI or PT. In case the person is enrolled as a regular employee, on the basis on the PF Wages and past PF membership, the person will be covered under EPF.
  Need to mention yes, also need to mention details for the withdrawal status. If the employee mentions the PF withdrawal status as ‘Yes’ then a transfer is not required.
  Jun 22, 2022 at 6:15 pm
  Reply
bilal
Hi Rishabh,
I run contract company with more than 20 temporary workers with salary of 18k.My client want me to cover EPF but workers don’t have EPF account and they don’t want any deduction from salary what should i do.
May 12, 2022 at 5:11 pm
Reply
1. Rishabh Ranjan
  Hi Bilal,
  Once employee strength reaches 20, it is mandatory to cover the establishment under the EPF Act.
  It is mandatory to cover employees under EPF, those who are drawing PF Wages (Gross-HRA) upto ₹15000.
  Jun 22, 2022 at 5:47 pm
  Reply
Suresh Houd Machetla
Hello sir,
My name is Duresh Macherla from Chengicherla, Hyderabad.
What my doubt is that can we do a salary break up in such a way that an employee gets whole salary as a take home without EPF coverage that too , all these employees being paid the EPF contributions so far, but in the light of changing all these employees from one company to another( existing company is Suresh software services and the new one is Suresh Serbices Pvt limited) ? For the new employees ok, they can be opted out.
But is this possible in the abovementioned case?
Could you please suggest any ways in that case?
Jul 5, 2022 at 11:15 pm
Reply
1. Rishabh Ranjan
  Hi Suresh,
  You can change your password by clicking on the ‘Forgot Password’ link on the UAN login page.
  Before updating the new mobile number on the PF portal, please ensure that you update the same (or any other details) for your Aadhaar card.
  Once Aadhaar details are updated, please visit the EPFO member portal, log in, and under ”Manage” click on ”Modify Basic Details”.
  Jul 27, 2022 at 12:03 pm
  Reply
2. Rishabh Ranjan
  Hi Suresh,
  Once you enroll under EPF, you continue to be a member as long as you’re employed.
  Sep 22, 2022 at 3:50 pm
  Reply
Shubham Shaha
Hi,
I have a question I have joined my First Job on 3rd May 2021 and left the job on 17th March 2022 and then joined second company on 13rd June 2022 and however filed Claim form 19 on 3rd July 2022 and finally got PF refund on 11th July 2022 and told the second company that I am not a member of PF and opted out but however they found that this person is existing member of PF. Whether I need to contribute to PF compulsorily because I withdrew the amount after joining Second Job. If yes then whether I have option in future after leaving this job to withdraw funds and close my PF account but again here there is limit that you can withdraw PF funds only after two months after leaving the Job. My purpose is that I dont want to opt in PF because there are higher returns in mutual funds over long term horizon. Your insights would be outmost valuable.
Jul 14, 2022 at 9:54 pm
Reply
1. Rishabh Ranjan
  Hi Shubham,
  Since you have withdrawn all your PF dues, currently you are not a PF member.
  If your PF wages is above INR 15000 and by submitting the Declaration Form (Form 11), you can opt out from PF.
  Technically, you cannot do so as you were a PF member at the time of joining your current employer.
  Sep 22, 2022 at 12:43 pm
  Reply
Maya
Hi Rishabh,
I have 5 years of service experience and have taken efp advance. I will be moving overseas and my 2 months of unemployment will complete in Sept 22. If I wish to withdraw whole amount from account, can it be done? Since I will have my aadhar linked number in abroad. Will I receive OTPs?
Jul 16, 2022 at 4:57 pm
Reply
1. Rishabh Ranjan
  Hi Maya,
  You can opt for PF withdrawal online.
  As for the OTP, employee need to check with your network service provider.
  Sep 22, 2022 at 12:40 pm
  Reply