Can I Reduce Employer's EPF Contribution to the Legal Minimum After Years of Higher Payments?

If I am paying PF contribution irrespective of the employee's qualifying salary, let's say his basic is Rs 40,000. He pays 12%, i.e., Rs 4,800, and the employer is also paying Rs 4,800 to his EPF account. Can I stop this practice and bring down the employer's contribution to the qualifying statutory amount at any time, even though the practice has been in place for several years?

Dear Suresh,

You can restrict employer contribution to the present EPF wage ceiling, i.e., Rs15,000/- per month. As and when the EPF wage ceiling goes up, you have to comply with the same. You can restrict it with a prospective date.

Hi Suresh,

I wish to inquire whether it is possible for me to reduce my contribution to the statutory requirement. Currently, I am paying more than the mandatory percentage. Can I adjust it to 12% of INR 15,000, which is the current limit?

Regards,
Suresh

Dear Suresh,

With effect from January 2018, you can restrict your EPF contribution to the present EPF wage ceiling, i.e., Rs 15,000/- per month (Rs 1,800/- contribution). This will be in force until the EPF wage ceiling is increased.

My employer's employee contribution is 10% each, not 12%. What are the consequences for serving employees and retirees?