Question 1

Why is my PF only ₹1,800 when my basic is much higher?

Accepted Answer

Because your employer is applying the ₹15,000 wage ceiling, and they are entitled to. Paragraph 26A(2) of the Employees’ Provident Funds Scheme limits the contribution of both the member and the employer to the amount payable on a monthly pay of ₹15,000, which at 12% is ₹1,800 a month. An employer may contribute on your whole basic plus DA instead, and many do, but nothing compels it. This page tells you which of the two you are on.

Question 2

Is my dearness allowance supposed to be included?

Accepted Answer

Yes, if your payslip has a DA line. Section 2(b) of the Act defines basic wages and excludes dearness allowance from that definition, which is where the confusion starts - but section 6 then sets the contribution on basic wages, dearness allowance and retaining allowance together, and paragraph 26A of the Scheme defines pay the same way. An employer computing 12% of basic alone has left money out, and this page prices that rule separately so you can see whether it is the one that produced your figure.

Question 3

My deduction is more than 12% of my basic plus DA. Is that wrong?

Accepted Answer

Not necessarily, and there are two honest explanations. Section 6 lets an employee contribute more than the statutory rate if they wish, with no obligation on the employer to match it - that is voluntary provident fund, and it is often set up at joining and forgotten. The other explanation is that your employer treats a wider set of allowances as wages than your basic plus DA. The page reports the wage your deduction implies, which is what separates the two: if it is a round number close to your gross, the base is wider.

Question 4

The employer contributes the same as me. Why does my passbook show less?

Accepted Answer

Because part of every employer contribution never reaches the provident fund. Section 6A diverts up to 8.33% of the wage to the Employees’ Pension Scheme, always computed on the ceiling wage, which caps it at ₹1,250 a month. On the ordinary arrangement that leaves ₹550 of an employer's ₹1,800 in your PF account. It is not missing money - it is buying a pension - but nothing on the payslip says so, and it is the commonest reason members write to EPFO.

Question 5

What if my deduction matches none of the rules on this page?

Accepted Answer

Then read the wage it implies. That figure is your deduction divided by the statutory rate, and it is what your employer must have contributed on. If it is not your basic, not your basic plus DA and not the ceiling, your employer has chosen a base of their own - which is allowed, and which your offer letter or the salary structure annexure should name. It is a one-line question for payroll, and having the number makes it a much shorter conversation.

Question 6

Can my employer deduct their own share from my salary?

Accepted Answer

No. Paragraph 31 of the Scheme says the employer’s share may not be recovered from the member, and section 12 of the Act forbids reducing wages to offset the contribution. A CTC structure that shows the employer contribution as part of your package is doing something different and legal - it is describing the cost of employing you - but the deduction line on your payslip should carry only your own share plus any voluntary contribution you asked for.

PF Deduction Check