Dear All.
this for PF & EPF deduction
Employees Provident fund organization, India (EPFO) EPF rates and calculation
28 SEPTEMBER 2009 17 COMMENTS
The EPF & MP (Miscellaneous provision act) act was came in to existence from March 14th 1952.The act is applicable all over India except the state of Jammu and Kashmir. Presently the following three schemes are providing to employees under this act.
1. Employee provident fund scheme (EPF) 1952.
2. Employees’ pension scheme (EPS) 1995
3. Employees deposit linked insurance (EDLIS) 1976.
An establishment with 20 or more workers should register with Employees provident fund organization which comes under any of the 180 industries mentioned. Click here for the list of industries comes under EPF. Even though there are certain exemptions are there will be discussed in another post. Here we mainly aimed for EPF rates and its calculation.
EPF, EPS, EDLIS rates in India
EPF, EPS and EDLIS are calculated on Basic salary, dearness allowances, cash value of food concession and retaining allowances if any.
“Retaining allowances means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services.”
Most of the organizations are following Basic+ DA Method. Below table tells you the rates of contribution of EPF, EPS, EDLI, Admin charges in India.
Scheme Name Employee contribution Employer contribution Paid to A/c No
Employee provident fund 12% 3.67% 1
Employees’ Pension scheme 0 8.33% 10
Employees Deposit linked insurance 0 0.5% 21
EPF Administrative charges 0 1.1% 2
EDLIS Administrative charges 0 0.01% 22
Sick industries like beedi, jute, guar gum factories, coir industry other than spinning sector
Scheme Name Employee contribution Employer contribution Paid to A/c No
Employee provident fund 10% 1.67% 1
Employees’ Pension scheme 0 8.33% 10
Employees Deposit linked insurance 0 0.5% 21
EPF Administrative charges 0 1.1% 2
EDLIS Administrative charges 0 0.01% 22
Inspection charges payable by employer
Inspection charges must be paid by the employer in the following Cases.
1. Some establishment are exempted from EDLI contribution as they are providing the same nature of benefit without any contributions from employee, such establishments are liable to pay 0.005% on Basic salary
2. The establishments exempted under the scheme should pay 0.18% of Basic salary towards inspection charges.
EPF Ceiling Limit
EPF ceiling limit is fixed to 6500/-.The employer is liable to pay contribution only on 6500/- Whatever is the basic salary
Calculation of Employees provident fund
Let us calculate the contribution of an employee who is getting a basic salary of Rs 3500/-
Contribution Towards Calculation Amount
EPF Employees share 3500 x 12% 420
EPS Employer share 3500 x 8.33% 292
EPF employer share 3500 x 3.67% 128
EDLI charges 3500 x 0.5% 18
EPF Admin charges 3500 x 1.1% 39
EDLI Admin charges 3500 x 0.01% 0.35 ( round up to Rs 1/-)
The above calculation is easy and there no complication
D N Sharma ( Manager _ HR & Admin.) Gurgaon.