Saying no to EPF isn’t easy—but it’s possible
Subscribe to enjoy similar stories. The moment Mr. A landed his first job at a tech company, he started thinking about his salary structure.
With an annual package of ₹12 lakh and a basic salary of ₹40,000 per month, he wondered if he really needed to contribute to the Employees’ Provident Fund (EPF). Across town, Mr. B, newly employed at an MSME with a ₹5 lakh annual salary and a basic salary of ₹14,000 per month, had heard about the challenges of withdrawing EPF funds and wanted to know if he could skip it entirely.
The answer isn’t straightforward. While Mr. A has the choice to opt out, Mr.
B doesn’t—thanks to the rules governing EPF eligibility. Most new employees can opt out of EPF if their basic salary, as defined by the EPF Act, exceeds ₹15,000 per month. However, those earning less than this threshold are automatically enrolled and must contribute.
Once an employee becomes an EPF member, there is no way to opt out later—even if their salary increases beyond ₹15,000. This means Mr. B is locked in, regardless of future salary hikes.
Read this | EPFO alert! How to avoid, deal with rejections, delays The Employees’ Provident Fund Organization (EPFO) clarifies that employees earning more than ₹15,000 in basic salary are not required to join the scheme—provided they are not already members. However, if both employer and employee agree, they can voluntarily opt in by submitting a request under Para-26 (6) of the PF Scheme. In practice, most employers enroll new hires by default and rarely inform them of the opt-out option.
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