The Employees’ Provident Fund (EPF) is a social security scheme in India that is managed by the Employees’ Provident Fund Organization (EPFO), which is under the Ministry of Labour and Employment, Government of India. EPF is applicable to organizations with 20 or more employees and certain other specified establishments. It is aimed at providing financial security and retirement benefits to employees.
EPF is a mandatory contribution scheme where both the employer and the employee make regular contributions. The contributions are calculated as a percentage of the employee’s basic salary and dearness allowance. The current contribution rates for EPF are as follows:
- Employee Contribution: 12% of the employee’s basic salary and dearness allowance is contributed by the employee towards EPF.
- Employer Contribution: The employer also contributes 12% of the employee’s basic salary and dearness allowance to the EPF on behalf of the employee.
It is important to note that the employer’s contribution of 12% is divided into two parts:
a) 3.67% is contributed towards the Employee Provident Fund. b) 8.33% (capped at Rs. 1,250 per month) is contributed towards the Employee Pension Scheme (EPS).
The employer’s contribution towards EPS provides pension benefits to the employee after retirement or in case of disability.
As of my last knowledge update in September 2021, these were the EPF contribution rates. However, please keep in mind that government policies may change over time, so it’s advisable to verify the current rates with official sources or the EPFO website for the most up-to-date information.
As of my last update in September 2021, the Employees’ Provident Fund (EPF) in India offers two primary schemes:
- Employees’ Provident Fund Scheme (EPF): This is the main scheme that covers the provident fund for employees. Both the employee and the employer make regular contributions to the EPF. The employee contributes 12% of their basic salary and dearness allowance, and the employer also contributes an equal amount. The contributions are pooled into the EPF account of the employee, and the funds grow with interest over time. The EPF is primarily meant to provide financial security and retirement benefits to the employees.
- Employees’ Pension Scheme (EPS): This is an additional scheme linked to the EPF, where a portion of the employer’s contribution (8.33% of the employee’s basic salary and dearness allowance, subject to a maximum of Rs. 1,250 per month) is diverted to the Employees’ Pension Scheme. The EPS provides pension benefits to the employee after retirement or in case of disability. The amount of pension received depends on the number of years of eligible service and the average salary of the last 12 months before retirement.
Both EPF and EPS are managed by the Employees’ Provident Fund Organization (EPFO), which is a statutory body under the Ministry of Labour and Employment, Government of India. The EPFO ensures that the funds are invested and managed properly to provide adequate returns to the employees.
It’s essential to note that government policies and schemes may evolve over time. For the most up-to-date information on EPF schemes, contribution rates, and other related details, it is recommended to visit the official EPFO website or consult with relevant authorities.