Understanding the Temporary EPF Contribution Cut: How Does It Affect Employers and Employees?

“Union Finance Minister Nirmala Sitharaman on Wednesday announced that the statutory provident fund or PF contribution of both employer and employee will be reduced to 10% each from the existing 12% each for all establishments covered by EPFO for the next three months.”

EPF & EPS Contribution Rate

And what will be the percentage rate of contribution towards EPF & EPS (employer) when it is fixed at 10% for the next three months?

Understanding the Notification

What does the below statement mean:

"In the said notification, in SCHEDULE II, after clause (iv), the following clause shall be inserted, namely:

(v) Any establishment, other than Central Public Sector Enterprises and State Public Sector Enterprises and other establishments owned by, or under the control of the Central Government or the State Government, as the case may be, in respect of wages payable by it for the months of May, June, and July, 2020."

-Is this applicable for State/Central public sector enterprises? And what will be the percentage rate of contribution towards EPF & EPS (employer) when it is fixed at 10% for the next three months?

Dear Kiran,

Employer Share of EPF at 10%:
- EPS at 8.33%
- EPF at 1.67%

Thank you.

Though EPFO has slashed the rate of contribution from 12% to 10%, CPSEs and State PSUs will, however, continue to contribute 12% as employer contribution.

If an employee's basic salary is more than $15,000, i.e., $20,000, a deduction of PF as per Covid-19 will be made at 10%.

Sir, I need some clarifications regarding the scheme.

Employee basic salary is more than ₹15,000, i.e., ₹20,000. What is the deduction of PF, ₹1800 or ₹2000?

Kindly clarify this aspect.

Is it compulsory to deduct 10%, or can we deduct 12% + 12% employer's share?