Understanding EPF Contributions: Are Employee Contributions Voluntary and How Are Employer Contributions Calculated?

Please clarify the following points:

1. Has the rule making employee contributions to EPF voluntary, as announced in the Union Budget 2015, become applicable?

2. I have read in many places that employer contributions will be calculated based on the threshold limit of the maximum basic salary (currently Rs. 15,000 and previously Rs. 6,500), regardless of whether the employee's basic salary is higher. For example, if an employee's basic salary is Rs. 17,000, should the employer contribution be calculated on Rs. 15,000 or Rs. 17,000?

Thank you.

I am not aware if any notification has yet been issued to activate the Union Budget proposal of making employee contribution to EPF voluntary. Salary threshold is also not specified yet. Whether the basic salary is 15000 or 17000, the employer's share will be on Rs15000 only.

In the corrected text, spelling, grammar, and punctuation errors have been addressed. The paragraphs have been properly formatted with a single line break between them to improve readability.

Dear Singh,

As per your question, the employee ceiling limit has been raised from 6500/- to 15000/-. However, for the employer, it remains the same at 6500/-. The percentages, rules, and pension regulations all remain unchanged.

Thank you.

Hi,

Please clarify whether this scheme of optional for employee share is applicable or not. We need to implement it in our company if it is allowed. Please reply.