Contribution to PF Schemes by Employees and Employers (Share Rate)

Contribution to PF Schemes by Employees and Employers, Payment of Contribution to Employees Provident Fund Scheme, 1952, Employees Pension Scheme, 1995 and Employees Deposit Linked Insurance Scheme, 1976.

Payment of Contribution

(1) The Rate of contributions payable under the three Schemes are as under:-

Contribution is calculated on the Basic Pay, Dearness Allowance including cash value of food concession and retaining allowances, if any, payable to each member.

Scheme Employees share Employers share
Employees’ Provident Fund Scheme, 1952 12 % * 3.67 % (amount in excess of 8.33%) (i.e 12%* – 8.33%)
Employees’ Pension Scheme,1995 NIL 8.33 % (No separate recovery. Diverted from & out of Provident Fund Contributions only)
Employees’ Deposit Linked Insurance Scheme,1976 NIL 0.5%

* 10 % In case of certain establishments (Jute, Beedi, Bricks, Coir industry, Gaur gum industries) and also to any establishment which employs less than 20 persons.

(2) The employee’s share of Provident Fund contribution may be deducted by Employer from the wages of the member before disbursement. However, such deduction should be made only from the wages for which the contribution pertains. For example, the employee’s share of contribution for June2013 should be deducted only from the wages for June 2013.

(3) A member is required to contribute compulsorily upto Rs.15,000/- of his wages and he may voluntarily opt to contribute beyond the wage ceiling of Rs.15,000/- (i.e. upto his ‘wages’). In such cases, an employer is not required to pay his own share of contribution above the wage ceiling of Rs.15,000/-. During the course of membership, if the ‘wages’ (Basic + Dearness Allowance including cash value of food concession and Retaining allowances) has crossed Rs.15000/-, the member and employer are required to pay Provident Fund Contribution upto Rs.15000/- only. In such cases the member cannot be treated as “excluded employee”.

There is no separate contribution payable to the Pension Fund. The contribution towards Pension Fund is diverted from the employer’s share of EPF contribution at the rate of 8.33% of the wages.

(5) An employee need not contribute under EDLI Scheme, 1976. The employer alone is required to pay the contribution.

(6) The Provident Fund contribution of contract employees and the matching contribution representing the employers share is to be payable by the contractor to the principal employer, every month.

PROVIDENT FUND ADVANCES/WITHDRAWALS

A member of the EPF can avail the advance/withdrawal during the period of his membership, whether in employment or not, for the following purposes:-

  • For financing Insurance policy,
  • For Housing (purchase of site, house, flat, and construction, addition/alteration of house and repayment of housing loans).
  • Financial assistance- on dismissal, discharge, retrenchment and closure/lock out.
  • For illness of the member/family member.
  • or marriage and post matriculation education.
  • To meet the loss of property due to natural calamity.
  • Loss in wages due to power-cut.
  • Purchase of Equipment for physically handicapped.
  • To withdraw the Provident Fund one year before retirement.

How to avail Provident Fund advances?

The Employees Provident Fund is a Social Security scheme mainly meant for the post retirement period of the working class. Though it is the main objective, it also provides for withdrawing their Provident Fund money to meet out certain contingencies.

The Provisions envisaged under paragraphs 62 to 68-O of the EPF Scheme regulates the withdrawals/advances that a member can avail of himself during his period of membership.

There is a common application form for all the advances i.e. Form-31 except for withdrawal under Para 62 for financing Life Insurance Policies.

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