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Remittance Of EPF Contribution

Remittance Of EPF Contribution

As per EPS Section 6,6A 6C, EPFS Chapter 5 Para 29,30,36 (1) Chapter IX Para 76,Para 3 And 4 Employees Pension Scheme, EDLI Para 7 and 8 the employer has to deduct employee contribution (12% of PF wages) along with matching employer contribution inclusive of additional admin charges of 1% [EPFO Notification S.O. 2011(E) dated 21st May 2018]and remit these monthly contributions online by obtaining ECR challan on the EPFO website. As per EPFO circular no. C-I/3(19)2016/ Clarification / ECR/7357 dated 21st July 2017, where an establishment consists of different departments or has branches, whether situated in the same place or in different places, it is mandatory on the part of all such multiple unit establishments to fill the details of location wise employees while filing monthly Electronic- challan-cum-Return. For the international workers the PF wages and EDLI wages shall be contributed on full basic wages and should not be restricted to the ceiling limit as prescribed by the government

The Employees’ Provident Fund(EPF) is one of the most popular investment options in India. In this, both the employer and the employee contribute 12% of the employee’s basic salary to the fund to create a corpus for the future.

The employer and employee make equal contributions to the EPF account as shown below.

Contribution by Monthly Percentage Contributed
Employer 12%
Employee 12% or 10%
Total 24%

Key Points about EPF Contribution:

  • 12% Employer’s contribution includes 3.67% EPF and 8.33% EPS
  • 10% EPF share is valid for the organizations where there are 20 or less than 20 employees /organizations with losses incurred more than or equal to the net worth (at the end of financial year) /organizations declared sick by the Board for Industrial and Financial Reconstruction
  • Total contribution made by the employer is distributed as 8.33% towards Employees’ Pension Scheme and 3.67% towards Employees’ Provident Fund.
  • The contribution made by the employee goes totally towards the provident fund of the employee.
  • Apart from the above-made contributions, an additional 0.5% towards EDLI has to be paid by the employer.
  • Certain administration costs towards EDLI and EPF standing at the rate of 1.1% and 0.01% respectively also have to be incurred by the employer. This means that the employer has to contribute a total of 13.61% of the salary towards this scheme.