Confused About EPF Employer Contribution Calculations? Let's Clarify Together

EPF Employer Contribution Query

Please find attached the 21Useful Chart for TAX Compliance. I also have a query about the EPF Employer Contribution. According to this chart on page no. 13, the contributions are as follows: 8.33% or a maximum of Rs. 541 for the Pension Fund, EDLI 0.5% of Basic+DA or a maximum of Rs. 32.50, and EDLI admin charges 0.01% of Basic+DA or a maximum of Rs. 0.65.

Now, my query is: if an employee's Basic+DA is Rs. 8000, what is the contribution of the Employee and Employer?

For example:
- 8000 * 12% = 960 Employee's contribution
- 8000 * 3.67% = 294 PF Employer contribution
- 6500 * 8.33% = 541 Pension Contribution
- 8000 * 1.1% = 88 Admin Charges PF
- 6500 * 0.5% = 32.5 EDLI
- 6500 * 0.01% = 0.65 Admin Charges of EDLI

Now, the total is: Employee's contribution is 960 + Employer's Contribution is 956.15 = Rs. 1916.15. Is this correct or not? Please confirm.

Thanks,

Regards,
J.N. Modi

Dear Modi, Thanks for sharing the nice and useful material, friend.

Calculation Breakdown

Basic = Rs. 8000/-
12% Employee PF = Rs. 960/-
12% - Rs. 541/- = Rs. 419/- Employer PF
Rs. 541/- or 8.33% EPS = Rs. 541/-

You can calculate the EDLI and Administrative charges for Rs. 8000/- and not on Rs. 6500/-. Hope you understand the calculation, Jay.

Regards,
Jay

Thank you very much for your immediate reply. Please find attached the EFP Challan. Could you please check it and confirm if it is correct or incorrect?

Thanks,
Regards,
J.N. Modi

Correction of EPF Contribution Calculation

Your interpretation of the guidelines and filling of the Challan is WRONG.

It should be the following:

• For Employee: 8000 * 12% = Rs 960 contribution for PF.

• For Employer: 8000 * 13.61% = Rs 1089 contribution (Pension Fund 8.33% up to Max Rs 6500: Rs 542 + PF: Rs 418 + EDLI/Admin Charges @ 1.61% as per the breakup = Rs 129 TOTAL: 542 + 418 + 129 = Rs 1089). (The round-off to the higher Rupee for each element may be more than Rs 1089)

Regards,
Rajusiachen