PF Deduction Rules are governed by the employees’ Provident Funds and Miscellaneous Provision Act, 1952. This is a central act applies to whole of India except the state of Jammu & Kashmir. In this article I have given all important provisions related to EPF.
The basic PF deductions rules are given below:
- EPF act applies to factories and establishments having 20 or more employees.
- All employees earning basic salary + DA + Retain allowance upto Rs. 15000 p.m are eligible for PF.
- Employee & Employer contribution is 12% each of Basic salary +DA+ Retain allowance.
- The contribution by employer & employee are payable on maximum wage ceiling of Rs. 15000.
- The Employee can pay at higher rate, in this case employer has no obligation to pay at such higher rate.
- For international worker, the ceiling limit of Rs. 15,000 is not applicable.
- The due date for monthly PF return is 25th of following month, which is filed online.
The EPF, EPS & EDLIS Rates are as follows:
| Contribution Head | Employee contribution | Employer Contribution |
| Employee Provident Fund | 12%* | 3.67% |
| Employees' Pension Scheme | 0% | 8.33% |
| Employees Deposit Linked Insurance | 0% | 0.5% |
| EPF Administrative Charges | 0% | 0.85% |
| EDLIS Administrative Charges | 0% | 0.01% |
Note under EPF
*Note: This rate is 10% applicable for:-
- Any establishment having less than 20 employees.
- A company declared as sick industrial company by the Board for Industrial and Financial Reconstruction
- Any establishment which has accumulated losses equal to or exceeding its entire net worth
- Any establishment in following industries:-
(a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum Factories.
The contribution is rounded to the nearest rupee.
The minimum EPF Administrative charges payable are Rs. 500. If there is no contributory member then minimum EPF administrative charges are Rs. 75.
Similarly minimum EDLI administrative charges payable is Rs. 200. If there is no contributory member then minimum EDLI administrative charges are Rs. 25.
In case Establishment is exempted under PF Scheme, Inspection charges @0.18%, minimum Rs 5/- is payable in place of Admin charges.
In case the Establishment is exempted under EDLI Scheme, Inspection charges @ 0.005%, minimum Re 1/- is payable in place of Admin charges.
Note Under EPS
- Contribution is only paid by the employer and no contribution is payable by employee.
- Pension contribution not to be paid:-
- If an employee crosses 58 years of age and is in service since EPS membership ceases on completion of 58 years.
- If an EPS pensioner drawing reduced Pension and later re-joins as an employee. In both the cases given in second point the Pension Contribution @8.33% is to be added to the Employer Share of PF. Here Pension contribution is not to be diverted and total employer share goes to the PF.
- If In case an employee, who is not existing EPF/EP member joins on or after 01-Sept-2014 with wages Ceiling above Rs 15000/- In these cases the pension contribution part will be added to employee share, EPF.
- A member joining after Fifty years of age, if not a pensioner, does not have choice of not getting the Pension Contribution on grounds that he will not complete 10 years of eligible service as required. The social security cover remains applicable till he/she is a member.
- For International Worker, higher wage ceiling of 15000/- is not applicable from 11-Sept-2010.
Note under EDLI
- Contribution to be paid on up to maximum wage ceiling of Rs. 15000/- even if PF is paid on higher wages.
- Each contribution is to be rounded to nearest rupee. For each employee getting wages above Rs. 15000, amount will be Rs. 75 Fixed.
- EDLI contribution is paid even if member has crossed 58 years of age and pension contribution is not payable.
- EDLI Contribution is paid as long as the member is in service and PF is being paid.
Please comment for any query on Basic PF deduction Rules and EPF, EPS, EDLIS Rates.
CA Harish Negi
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Abhay Rana says
Hi, I am running a pvt. school in Himachal Pradesh and I am very confused how to make salary stack up of my teachers. Please advice if I am giving Rs. 7000 salary to my teacher then how much EPF should be deducted.
SATISH says
Employee age 50 years crossed this is add in epf