Loading page
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
A contribution an employee chooses to make to their provident fund account above the statutory 12% of PF wage, deducted through payroll. The employer is not required to match it, and it earns the same interest as the rest of the EPF balance.
Employees usually choose VPF at the start of the financial year, often at the same time as the tax declaration, and payroll then deducts the chosen amount each month along with the statutory 12%. It is reported in the ECR as part of the employee's contribution.
As an example, an employee with a PF wage of ₹15,000 contributes ₹1,800 statutorily. Choosing VPF of 10% of that wage adds ₹1,500 a month, so ₹3,300 goes to the PF account in total, while the employer's contribution stays where it was.
Payroll has to watch two points. Policies often allow changes to VPF only at set times, to stop monthly switching. And where combined employee contributions are high, interest on part of them may be taxable under current rules, so employees choosing large amounts should check how that applies to them.
Any amount above the mandatory 12% of PF wages, up to 100% of basic plus DA. The employee asks HR in writing, and payroll deducts it alongside the regular contribution.
No. The employer's statutory contribution stays at 12% of PF wages regardless of what the employee adds voluntarily.
Interest on employee contributions above a set annual limit is taxable. Payroll and employees should check the current rule each year.
Usually yes, by giving notice to HR, though employers commonly allow changes only at the start of a financial year. The policy should state when changes take effect.
14-day free trial · Full access to all 12 modules · Zero implementation fee · Cancel anytime