Everything about EPF employer contribution

EPF is basically a contribution of fund by the employee and the employer. A salaried individual should pay 12% of the basic salary and the other 12% is contributed by the employer. A total amount of 24% of your salary is contributed every month. Provident fund employer contribution helps to secure his or her retirement life.

Provident Fund provides 12% of the PF Wages from both employee and employer.

EPF contribution rate table helps to understand all the EPF contribution calculation 

Employee Employer
A/c No 1: PF contribution Account
A/c No 2: PF Admin account
A/c No 10: EPS account
A/c No 21: EDLIS account
A/c No 22: EDLIS admin account
12 3.67
1.10
8.33
0.50
0.01
Total 12 13.61

 

Table source: http://www.sensystechnologies.com/blog/?p=312

PF admin charge = Employer will pay 1.1 % of PF wages
EDLIS contribution: Employer will pay 0.5% of the PF wages
EDLIS admin charge: Employer will pay 0.01% of PF wages.
Total additional percentage employer has to pay is rupees : 1.61% of basic so employer has actually to pay 13.61 % of Basic and employee has to pay only 12% of pf wages.

Employees complete 12% goes to PF account and employer contributions 8.33% goes to pension contribution in EPF and 3.67% goes to PF Fund.

EDLI contribution has to be paid even if the employee has crossed 58 years age and pension contribution is not payable. As long as the member is in service he has to pay the PF amount.

Conclusion:

EPF or Employees’ Provident Fund is very important to secure your life after retirement. When you start working, you and your employer both contribute 12% of your basic salary to your EPF account .The entire 12% of your contribution amount goes into your EPF account along with 3.67% from your employer company, while the 8.33% amount from your employer’s side is diverted to your Employee’s Pension Scheme. It’s important to note that if your basic payment is above Rs. 6,500 per month, your employer can only contribute 8.33% of 6,500 that is Rs. 541/- to your EPS and the balance goes into your EPF account. EPF is active every time you receive your payment. In case of a job change it is very important to update your EPF contribution details with your new company by giving your EPF number to continue the contribution.