EPF Contribution Confusion: Is My Company's Share Really Less Than Mine?

With regard to the 09-10 EPF statement received via the company, the company's contribution was less than the employee's (as per the CTC as well). The HR mentioned that the amount does not include pension; however, the entire amount (same as the employee's contribution) would be received if withdrawn. Please advise if true.

Thank you for your prompt response.

1) The EPF statement was on an EPF letterhead statement summary.
2) There is no discrepancy in employee contribution.
3) Under employer contribution, does a portion of it go to the Family Pension Fund contribution?

Regards,

It is true that the amount of pension is not usually displayed on the PF slip, and hence you may get confused.

Out of the Employer's Contribution, 8.33% goes towards the pension scheme, and only the remaining 3.67% is reflected in the PF Statement. In case you discontinue after changing jobs and you are not subscribing to EPF, and you withdraw the amount in the EPF, the pension amount (8.33% per month) is added to your PF for withdrawal.

Regards,
Rajusiachen

Thanks a lot, guys. Hats off to you. One last query: if I change my job and request the current employer to transfer without withdrawing, but the new employer does not offer PF facilities, how long will the EPF hold on to the account?

1) Do you recommend that I withdraw the amount in this case?
2) If I withdraw, would there be an income tax implication (employment for 2.7 years)?

Regards,
Shaun

I do have a disagreement with Anil Arora. Let me reproduce the area of disagreement here:

"Employer Contribution to Provident Fund"

"Employers are required by the PF Act to match the statutory contribution to PF, i.e., 12% (10% in some industries) of basic (which includes DA). For example, if you contribute ₹12,000 per month on a salary of ₹100,000 per month, then the employer also contributes the same amount. It is a statutory requirement."

As per statute, it is not mandatory that the employer's share should be equal to the employee's share. On the other hand, the employer can restrict their share of contribution to ₹780, i.e., 12% of ₹6,500. Therefore, if an employee's basic + DA is ₹100,000, and they are contributing ₹12,000 (being 12%), the employer is not under a legal obligation to contribute the same ₹12,000 but can restrict it to 12% of ₹6,500.

Now, the PF contribution slip will not display the employer's contribution of 8.33% since it is separately accounted for as a Pension Fund. Therefore, your PF slip will show only Provident Fund contributions of 12% of the employee's and 3.67% of the employer's shares.

Regards,
Madhu.T.K

Actually, the question arose from a doubt about the lesser contribution by the employer, and the HR people are not ready to clear his doubts. Well, this is to bring to your kind notice that another member also mentioned the same. You have used, “the PF contribution slip will not display the employer's contribution of 8.33% since it is separately accounted as Pension Fund.” I have never denied this. Also, I have enclosed the weblink of the official website of EPF for more clarification and details. I just provided him with the basic and required information.

I am going to disclose some more information on EPF, including EPS and EDLIS, with the rates and calculation examples. I hope that would be enough to clear all doubts here for you and all other members. Well, thanks for raising your questions.