EPF calculation: In the CTC salary model, take-home pay goes up by 4% of wages before tax, but for others hike in take-home is at the cost of reduced total salary.
Employees Provident Fund (EPF) Calculation: In order to tide over the immediate liquidity crisis due to Covid-19 pandemic, the ministry of labour and employment has notified the reduced rate of provident fund contribution for employer and employee from existing 12% of monthly basic pay and dearness allowance to 10% for the months of May, June and July 2020. This will cover all classes of establishments covered under the Provident Fund Act barring central and state public sector enterprises or any other establishment owned or controlled by or under control of the central government or state government.
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The move is intended to benefit both 4.3 crore members and 6.5 lakh establishments. There is no change in the EPF administrative charges (0.5% of EPF wages subject to minimum of Rs 500) and EDLI contributions (0.5% of wages) both payable by employers. The reduced rate of contribution (10%) is minimum rate of contribution during the three months. The employer, employee or both can contribute at higher rate also.
Source: Financial Express
