Understanding PF Requirements: Is PF Mandatory for Salaries Above ₹15,000?

TrackMyPF by Finnable, Download for Smarter PF Management

The Employees’ Provident Fund (EPF) scheme in India plays a vital role in securing your retirement savings. It serves as a cornerstone savings scheme designed to ensure financial security for employees post-retirement. Nevertheless, there often exists ambiguity regarding EPF contributions for those earning salaries surpassing ₹15,000. In this discourse, we aim to elucidate the PF requirements and dispel common misconceptions surrounding this domain. One of the most common questions regarding PF eligibility surrounds the salary threshold – is PF mandatory for salaries above ₹15,000 ?  This blog dives deep into this topic, clarifying the requirements and providing insights for various scenarios.

Demystifying the ₹15,000 Salary Limit:

Traditionally, the EPF scheme was mandatory for all salaried employees earning up to ₹15,000 per month.  However, this limit applies to a specific aspect of the scheme – automatic enrollment.  Let’s break it down:

Mandatory for Salaries Below ₹15,000: For establishments with  20 or more employees, the EPF scheme is mandatory for all employees earning a basic salary of up to ₹15,000.  In these cases, both the employer and employee contribute a fixed percentage of the employee’s basic salary towards their EPF account.

Voluntary for Salaries Above ₹15,000: For employees earning a basic salary above ₹15,000, the EPF scheme becomes voluntary. This means that neither the employer nor the employee is automatically enrolled in the scheme for establishments with 20 or more employees.

Understanding the Exceptions:

While the ₹15,000 limit applies to automatic enrollment, there are some key exceptions to consider:

New Establishments: If a company is newly established and has less than 20 employees, the EPF scheme is not mandatory for any employee, regardless of their salary.

Existing Employees with Salary Increase: If an employee’s basic salary in an existing company (with 20 or more employees) increases and crosses the ₹15,000 threshold, their existing EPF account remains active.  They and their employer continue contributing unless they opt-out (which is a rare option).

Employee Opt-in for Higher Salaries:  Even for salaries above ₹15,000,  employees can opt-in to the EPF scheme and contribute towards their retirement savings.  This requires a joint application by the employee and employer to the Assistant PF Commissioner.

Navigating the PF Landscape for Salaries Above ₹15,000

Now that we understand the basic rules, let’s explore how the PF scenario unfolds for those earning more than ₹15,000:

Scenario 1: Existing Employee, Salary Increase Above ₹15,000: If you’re already enrolled in the EPF scheme and your salary increases above ₹15,000 in your existing company, your contributions continue as usual.  You and your employer keep contributing to your existing EPF account.

Scenario 2: New Employee, Salary Above ₹15,000: If you’re a new employee with a starting salary exceeding ₹15,000 in a company with 20 or more employees, you won’t be automatically enrolled in the EPF scheme.  However, you can discuss opting-in with your employer.

Scenario 3:  Employee Preference for PF with Salary Above ₹15,000: Regardless of the automatic enrollment threshold, you can always express your desire to join the EPF scheme, even if your salary surpasses ₹15,000.  This requires a joint application with your employer.

Benefits of PF for Salaries Above ₹15,000

While not mandatory for those earning above ₹15,000, the EPF scheme offers significant benefits:

  • Retirement Savings: Regular contributions to your EPF account accumulate over time, providing a substantial corpus for your retirement.
  • Tax Benefits: Both employer and employee contributions towards EPF enjoy tax exemptions, making it a tax-efficient savings scheme.
  • Interest Earnings: Your EPF account earns attractive interest rates, further boosting your retirement savings.
  • Additional Benefits:  EPF membership also provides benefits like life insurance coverage and pension benefits upon retirement (under the Employees’ Pension Scheme – EPS). 

You can now monitor your PF balance through Finnable’s TrackMyPF app, which enables users to track their current balance, review transaction history, estimate potential withdrawals, and forecast future balance growth. 

Empower Your PF Management with TrackmyPF app by Finnable: 

Dive into a simplified experience of managing your Provident Fund investments. TrackmyPF delivers a user-friendly interface that allows you to effortlessly oversee your PF balance and transaction records. 

Main Features:

  • 24/7 Real-Time PF Balance: Always keep an eye on your current PF balance to make informed financial decisions promptly.
  • Withdrawal Assistance: Simplify the withdrawal process with our guide that explains how much you can withdraw and when, complete with insights into necessary conditions and procedures.
  • Employer Contribution Tracking: Ensuring your employer contributes the correct PF amount each month is vital. TrackMyPF simplifies this by displaying your monthly employer contributions in the app and alerting you to any discrepancies, enabling prompt resolution.
  • Future Balance Estimations: Prepare for the future with our tool that projects your PF balance over time, helping you plan effectively for retirement.
  • Insights on Growth and Tax Savings: Learn about the growth of your PF balance, discover tax advantages, and use this knowledge to optimize your financial strategies.
  • Ease of Use: TrackMyPF offers a straightforward, user-friendly interface that makes managing your PF straightforward.
  • Privacy Measures: Your privacy is our top priority. Your personal information remains confidential and is never shared with third parties.

Click to download https://play.google.com/store/apps/details?id=com.finnable.trackmypfbyfinnable&pli=1 


In summary, PF compliance is essential for employers to fulfill their legal obligations and safeguard employees’ financial interests. By understanding and adhering to PF regulations, employers can avoid penalties, legal disputes, and reputational damage. Moreover, prioritizing PF compliance demonstrates a commitment to employees’ welfare and financial security.

While PF contributions are mandatory for employees earning wages up to ₹15,000 per month, those earning higher salaries have the option of voluntary contributions. Employers should educate employees about the benefits of voluntary PF contributions and encourage them to make informed decisions regarding their financial future.

Ultimately, maintaining PF compliance not only benefits employees but also contributes to a positive work culture and organizational reputation. By fostering a culture of financial well-being and responsibility, employers can create a conducive environment for employee growth and success.


Frequently Asked Questions (FAQs):

Finnable has set a required minimum age for personal loan of 21 years for individuals to be eligible for a personal loan. This ensures that applicants have reached legal adulthood and are capable of entering into a financial agreement.

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Borrowers nearing retirement may have unique financial needs, such as retirement planning, medical expenses, or supporting their children's education. Finnable offers personalised loan solutions that consider the specific circumstances of pre-retirement individuals, helping them meet their financial goals.

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Amit Arora

I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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