Labour Ministry notifies reduced PF contribution rate for next three months
- The labour ministry said employees can contribute more than the newly set limit of 10 per cent of basic wages to their Employees’ Provident Fund (PF) account for the next three months, but employers don’t need to match the higher contribution.
- “Under the EPF Scheme, 1952, any member has the option to contribute at a rate higher than statutory rate (10 per cent) and employer can restrict his contributions 10 per cent in respect of such employee.”
- Employer contributions to the social security scheme run by the EPFO shall be 10 per cent of the wages of May, June and July due in June, July and August, respectively, the statement explained.
- The ministry on Monday notified lower rates of provident fund contribution at 10 per cent, increasing the in-hand salary of 4.3 crore provident fund subscribers.
- Finance minister Nirmala Sitharaman had announced the reduction of statutory provident fund contribution by both employers and employees for the next three months to 10 per cent of basic wages from 12 per cent.
- The reduction of rate of contribution is not applicable to establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central Government or State Government.
- These establishments shall continue to contribute 12 per cent of basic pay and dearness allowances (DA).
- These establishments shall continue to contribute 12 per cent of basic pay and dearness allowances (DA).
- As a result of reduction in statutory rate of contributions, the employee shall have a higher take home pay due to reduction in deduction from his pay on account of EPF contributions and employer shall also have his liability reduced by 2 per cent of basic wages of his employees
About EPFO-
- The Employees’ Provident Fund Organisation (abbreviated to EPFO), is an organization tasked to assist the Central Board of Trustees, Employees’ Provident Fund a statutory body formed by the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 and is under the administrative control of the Ministry of Labour and Employment, Government of India.
- EPFO assists the Central Board in administering a compulsory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organized sector in India.
- UNRWA also provides assistance, but not refugee status, to those who fled or were expelled during and following the 1967 Six Day War.
- Formation- 4 March 1952
- Headquarters – New Delhi
- Central PF Commissioner – Sunil Barthwal
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