Employees Provident fund organisation,india ( EPFO ) EPF rates and calculation

The Epf& MP (Miscellaneous provision act) act was came in to existence from March 14 th 1952.The act is applicable all over India except the state of Jammu and Kashmir.Presently the following three schemes are providing toemployees under this act.

  1. Employee provident fund scheme (EPF) 1952.
  2. Employees’ pension scheme (EPS) 1995
  3. Employees deposit linked insurance (EDLIS) 1976.

An establishment with 20 or more workers should register with Employees provident fund organization which comes under any of the 180 industries mentioned. Click here for the list of industries comes under EPF. Even though there are certainexemptions are there will be discussed in another post. Here we mainly aimed for EPF rates and its calculation.

EPF, EPS, EDLIS rates in India

EPF, EPS and EDLIS are calculated on Basic salary, dearnessallowances, cash value of food concession and retaining allowances if any.

“Retaining allowances means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services.”

Most of the organizations are following Basic+ DA Method. Below table tells you the rates of contribution of EPF, EPS, EDLI, Admin charges in India.

Scheme Name
Employee contribution
Employer contribution
Paid to A/c No
Employee provident fund12%3.67%1
Employees’ Pension scheme08.33%10
Employees Deposit linked insurance00.5%21
EPF Administrative charges01.1%2
EDLIS Administrative charges00.01%22

Sick industries like beedi, jute, guar gum factories, coir industry other than spinning sector

Scheme Name
Employee contribution
Employer contribution
Paid to A/c No
Employee provident fund10%1.67%1
Employees’ Pension scheme08.33%10
Employees Deposit linked insurance00.5%21
EPF Administrative charges01.1%2
EDLIS Administrative charges00.01%22

Inspection charges payable by employer

Inspection charges must be paid by the employer in the following Cases.

  1. Some establishment are exempted from EDLI contribution as they are providing the same nature of benefit without any contributions from employee, such establishments are liable to pay 0.005% on Basic salary
  2. The establishments exempted under the scheme should pay 0.18% of Basic salary towards inspection charges.

EPF Ceiling Limit

Epf ceiling limit is fixed to 6500/-.The employer is liable to pay contribution only on 6500/- Whatever is the basic salary

Calculation of Employees provident fund

Let us calculate the contribution of an employee who is getting a basic salary of Rs 3500/-

Contribution Towards
Calculation
Amount
EPF Employees share 3500 x 12%420
EPS Employer share 3500 x 8.33%292
EPF employer share 3500 x 3.67%128
EDLI charges 3500 x 0.5% 18
EPF Admin charges 3500 x 1.1% 39
EDLI Admin charges 3500 x 0.01% 0.35 ( round up to Rs 1/-)

The above calculation is easy and thereno complication.

Calculation of EPF for employees getting a basic salary over and above the ceiling limit 6500/-

In such cases companies uses different method for calculation as per their pay roll policy.

Consider an employee getting a basic salary of 7500/-

We can calculate it in different ways. The only thing you should take care is, EPS is calculated only up to 6500/- that means the maximum amount is fixed to Rs 541.00. The three methods mentioned below are based on the above example.

Method-1

If your company consider total basic salary above the limit fixed 6500.00 for PF calculation

Contribution Towards
Calculation
Amount
EPF Employees share 7500 x 12%900
EPS Employer share 6500 x 8.33%541
EPF employer share 7500 x 12% (-) 541359
EDLI charges 6500 x 0.5% 32.5
EPF Admin charges 6500 x 1.1% 71.5
EDLI Admin charges 6500 x 0.01%0.65 ( Round up to Rs 1/-)

I will explain how Employer contribution of EPS and EPF is calculated.

Employer is decided to contribute on total basic salary which is 12 % on 7500.00 equal to 900.00

EPS Share is fixed to 541.00

Balance (900-541) goes to EPF account 359.00

Total share 900.00

Out of Rs 900.00 EPS share is RS 541/- which is fixed for a basic salary greater than 6500/-. The balance amount is 900-541 = 359.00 which willgo to EPF account.

You may be thinking that, what about 3.67%?, Here you don’t need to care about it.

Method2

Some companies follows the below method in which employee share is calculated on 7500/- and employer share is calculated on up limit Rs 6500/-

Contribution Towards
Calculation
Amount
EPF Employees share 7500 x 12% 900
EPS Employer share 6500 x 8.33%541
EPF employer share 6500 x 3.67% 239
EDLI charges 6500 x 0.5%33
EPF Admin charges 6500 x 1.1%72
EDLI Admin charges 6500 x 0.01% 0.65 ( Round up to Rs 1/-)

Method3

Some are calculating both employer and employee shares on 6500/- in spite of higher basic salary than 6500.00

Calculation towards
Calculation
Amount
EPF Employees share 6500 x 12%780
EPS Employer share 6500 x 8.33%541
EPF employer share 6500 x 3.67%239
EDLI charges 6500 x 0.5%33
EPF Admin charges 6500 x 1.1%72
EDLI Admin charges 6500 x 0.01%0.65 ( Round up to Rs 1/-)

YOU CAN DOWNLOAD AN EPF CALCULATOR IN EXCEL FORMAT HERE

Remittance of contribution

It is the duty of employer to remit the contribution deducted to the government before 15th of the following month.

Employer interest Liability

Employers are liable to pay @12% interest on late payment of EPF, EPS, EDLI, Administrative charges

Damage liability

An employer is remitting EPF, EPS, EDLI, and Admin charges late shall be liable to pay damages as penalty ranging from 17% to 37% depending up on delay.

I don’t think the above post is a complete one, if you have different opinion and experience we can discuss it in our comment section that will make this post a complete one.

In the meantime you can subscribe our newsletter below to stay updated with us.

90 Responses to “Employees Provident fund organisation,india ( EPFO ) EPF rates and calculation”

  1. N.V.Lal says:

    Dear Sir

    Please clarify the following matter in calculation of EPF.

    As per chapter V, contributions, in website epfigms.gov.in, Under Employee’s Providen fund act scheme, 1952,

    (1) The contributions payable by the employer under the Scheme shall be at the rate of [ten per cent] of the [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any)] payable to each employee to whom the Scheme applies:

    However, recently one letter issued by FPF office stated that the FPF is calculated only on basic wages. No dearness allowance and retaining allowance not considered for EPF calculation.

    It is highly appreciable if the above contradictory statement clarified

    N.V.Lal
    From West Central Railway

  2. Lakshmipathy G says:

    Hi Team,

    Need your help.

    My Sister worked in a MNC company. Due to her family problem she unable to continue the service with the company.

    She relived form her job with notification but she did not serve the notice period.

    She almost completed 1.5 years service in this organisation.

    It is possible to get her PF amount from PF office.

    Awaiting your revert.

    Regards
    Lakshmipathy G

  3. SAJU ( ADMIN) says:

    Definitely, you can transfer the pf account with the new employer or claim the entire money paid with the help of employer

  4. Mathankumar R says:

    Good Information in simple way. Thanks a lot.

  5. Mahesh Varma says:

    We are working and managing hard to manage expediture of day to day cost and any how managing the salary and other essential requirement. Situation where we are running at 18% production capacity , sudden lien mark by RPFC to collect Employer contribtution is created all the balance in disorder.

    Our power supply got disconnected two times in between these six months.

    We have filed writ petition to gert back the money which was collected from bank kept for salary.

    Kindly advise if there is any information which can be brought to notice of honourable judge to get breather.

  6. Mahesh Varma says:

    we have declared sick industry in year 2006 by hon’ble BIFR

  7. Srivathsan says:

    Hi team,

    We have software company. I have doubt in EPF scheme. As per your excel template it shows basic salary is above 6500 means PF amonut is 780 or if basic salary is less than 6500 means Basic*12%. Am in hyderabad. PF officer came to office and he saying whatever basic salary *12% employee contribution. that means my employee basic salary is 14000 means i want to deduct Rs.780 from employee or 14000*12%= 1680 from employee. same thing he is saying employer contribution is 13.67%. please guide me whether he is trying to get more money from me? Please give workings both for employee and employer contribution ,if basic is 14000 and 6000.

  8. Nishit says:

    Sir,

    As company are depositing only PF Contribution by Employee + PF Contribution by Employer – 541, my basic is 23000, So my question is if i want to withdraw the entire PF, will the EPF office also pay me the Pension Amount.

    Also If they only allow to withdraw PF (Both Contribution), then when i can awail the Pension amount.

    Also how can know my pension amount.

  9. Deepa Sood says:

    Sir,

    We had made an application in July’11 to the Company’s PF trust to transfer the PF to the new company PF account. Actual Transfer took place in Nov’11. Please advice in case i am entitled to receive interest on the delay in transfer of PF. if yes, at what rate.

    is there also a penalty on Company for delay in transfer of PF

  10. Deepa Sood says:

    Sir,

    We had made an application in July’11 to the Company’s PF trust to transfer the PF to the new company PF account. Actual Transfer took place in Nov’11.

    Please advice in case i am entitled to receive interest on the delay in transfer of PF. if yes, at what rate? is there also a penalty on Company for delay in transfer of PF

  11. rajesh says:

    edli charges should be calculated on eps or epf wages

  12. Nilesh Makavana says:

    It’s good example but little complicated.

  13. gangadhar says:

    hello sir,
    i need some help.i dont know how to calculate the total pf balance .please help me,
    employee contribution is 280990 and employer contribution is 156624 and also tell me how did u calculate ?

    thank u
    with regards
    gangadhar

  14. Sambasivaiah K says:

    Wages lowered more than half and avoided the contribution to the extent of 50% whom to complain.

  15. sudhir says:

    Dear Sir,

    If any company makes delayed payment of PF for say 30 days due to mismatch of Challan and Cheque amount, unknowingly, Pl let me know what will be the maximum penalty leviable by RPF Commissioner for the delayed period under the provisions of EPF & MP Act ?

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