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Jun 28, 2023 · EPF And Your Salary: The Working. If you are an employee, you pay a certain part of your salary towards the EPF scheme. This amount is often matched with an equal contribution from your employer. The combined amount is then deposited with the Employee Provident Fund Organisation (EPFO).
- The contribution of an employer towards the employee’s EPF account is 12% of the salary (basic salary+ dearness allowance+ retaining allowance). The maximum salary limit on which the employer’s contribution is calculated is capped at Rs.15,000.
- Similarly, the employee contributes 12% of his salary to the EPF account. However, as per the employee has the choice to contribute more to his EPF account as per his discretion.
- However, it should be noted that not all of the employer’s contribution goes to the EPF account. Out of the 12% of employer’s contribution, 8.33% goes to the Employees’ Pension Scheme (EPS) and the balance will be credited to the EPF account.
- Additionally, the employer also pays 0.5% towards the Employee Deposit Linked Insurance (EDLI), 0.01% as EDLI handling fees and 0.50% or Rs.500 whichever is higher as the EPF administrative charges.
Jan 18, 2024 · The EPF is a scheme for salaried employees in the organized private sector to save towards retirement. Synonymous with the 401k, both employees and employers contribute 12% of the employee's salary to the fund. The fund also acts as a guarantee for employees in case of loss of employment.
- Is EPF deducted on stipend? A trainee or an intern is not an employee by the definition of the Act and the schemes defined under the Act. EPF is not deducted from the stipend earned by a trainee or an intern subject to the condition that such trainees are covered under either the Apprenticeship Act or Industrial Employment (standing orders) Act or the interns are engaged through recognized institutions undergoing on-job training as part of their curriculum.
- Can an employer restrict his share of contribution to the wage ceiling limit of Rs. 15,000? An employer is under no obligation to contribute over and above the PF wage celling limit.
- Can an employer deduct the employer’s contribution towards EPF from the wages of employees? No, an employer cannot deduct the employer’s contribution towards EPF from the wages of employees.
- Can a member pay contribution beyond the wage ceiling limit? Yes, the member can contribute beyond the wage ceiling limit of Rs. 15,000. The total contribution i.e., voluntary + mandatory can be up to Rs.
The employer is also required to pay his matching contribution up to Rs.15, 000/-. Employees drawing more than Rs.15000/- can also become a member of EPF by giving option under para 26(6) of the EPF Scheme. The option has to be submitted to the EPF office within 6 months of joining of such member.
Jan 30, 2024 · The EPF is a retirement savings fund responsible for ensuring members’ retirement well-being. Therefore, the EPF practices prudent investment strategy with greater emphasis on preserving capital and providing long-term stable returns supported by a comprehensive investment risk management framework.
