Can Employers and Employees Agree on a Lower EPF Contribution Rate, Like 6%?

Hi, I just wanted to ask, is it possible to have PF less than 12%? Maybe 6%, with both employers and employees contributing.

PF is fixed at 12% of the basic salary or ₹780, whichever is minimum.

Regards,
Upasana

It is not possible to contribute less than 12% from each party. Furthermore, the employer must bear the administrative charges of 1.61% as well. According to the EPF & MP Act, 1952, the rate of contribution is 10% only in some cases such as:

- Less than 20 employees
- Sick industries declared as per the Act
- Companies which have accumulated losses at the end of the financial year
- Manufacturers of Jute, Beedi, and Brick, etc.

Regards,
Ramesh Vuriti

In case the establishment is not covered under the EPF Act 1952 or the employees are excluded, then their PF contributions may be at a lesser rate. Why would an employee choose to reduce their benefits?