Is Employer's PF Contribution 12% or 13.61%? Seeking Clarification on Calculations

Clarification on Employer Contribution to PF

I have studied here that the employee contribution of 12% is his PF amount. The employer's 12% will be further divided into PF & Pension fund as 8.33% & 3.67%, so the total is 12%. The remaining 1.61% is admin charges. They are further divided as 1.1% (Admin Charges), 0.5% (EDLI Charges) & 0.01% (EDLI Admin charges), so the total will be 13.61%.

Now here, the employer contribution becomes 13.61% instead of 12%.

Kindly suggest if the employer contribution is 12% or 13.61%.

Regards,
Amrita

Dear Friend,

Understanding Employer Contributions

Employer contributions are split into two parts: P.F (3.67%) and FPF (8.33%). About 1.61% is an administration cost/charge to the employer. As per P.F norms, the employer has to pay 1.61% administration charges on total wages, and these charges are not considered as income for the employee. Note that at the time of withdrawal, the employee receives only 24% (employee 12% + Employer 3.67% (P.F) + 8.33% (FPF)).

Similar questions have been raised many times in this forum. My suggestion is that you use the search tab located on the left side at the top. I am sure you will find a wealth of information on this matter.

Regards

As per my knowledge, the employer contribution is 13.61%, which is actually a combination of 12% of Basic + DA amount of an employee. This, as you mentioned, is further split as 8.33% going to the employees' Pension Fund and 3.67% going actually to employees' PF account. The remaining 1.61% from the total 13.61% consists of administrative charges, as you said.

Hope you have understood the breakdown correctly.

Regards,
Apeksha

As I know, the employer contribution is 13.61%, but only 12% of the employer's share goes into the employee's PF account. An employee also enjoys the benefit of EDLI in case of permanent disablement, and the employee's family receives the benefit after the employee's death.

Hope you understand.

Regards,
R.D. Sharma