As part of the government’s Atma Nirbhar Bharat package, in May, Finance Minister Nirmala Sitharaman announced that monthly EPF contributions (of both employers and employees) was to be reduced from 24 per cent to 20 per cent for the months of May, June and July 2020.
Since the reduced Employees’ Provident Fund (EPF) contribution amount was for three months (till July), from August onwards the EPF contribution will get deducted at 24 per cent again (i.e., 12 per cent each by the employee and the employer).
How much is contributed to EPF kitty every month
According to the EPF scheme rules, the employee contributes 12 per cent of basic wages plus dearness allowance from his salary every month towards his EPF account, and the employer matches the contribution of 12 per cent. So, in total, 24 per cent of the employee’s pay goes towards his/her EPF account.
Out of the total 24 per cent contribution, the employee’s share (i.e., 12 per cent) and employer’s 3.67 per cent goes to the EPF account, while the remaining 8.33 per cent of the employer’s share is diverted to the Employees’ Pension Scheme (EPS) account.
Source: The Economic Times
