What is Employer Contribution to PF?

Posted on 05th Jul 2018 | 1873 views

3 avg. rating (60% score) - 2 votes

PF percentage:

PF percentage is the rate at which employee and employer contribution towards the PF scheme. Monthly PF percentage of an employee is the 12% of his/her wage whereas the employer should pay additional charges of 1.16% along with 12% so that the employer PF percentage is marked at 13.16% of basic with effect from 1st April 2017.

EPF Contribution

EPF Contribution:

EPF contribution is the amount deposited by employee and employer towards PF to secure the course of an employee after retirement. The employee has to pay 12 percent of his monthly wage to EPF and this amount directly goes under the EPF scheme. By depending upon employees convenience, he/she can contribute more than 12% of their basic pay. Having an EPF account ensures security and other bonus such as added interest on the accumulated PF amount annually.

An employer contribution to PF is noted at 13.16% of basic employee pay but this total is not deposited directly in PF but is divided into many. The employer contribution break-up towards EPF is 3.67% goes to EPF ( Employee provident fund), 8.33% is contributed to EPS ( Employee pension scheme), 0.5% to EDLI ( Employees deposit linked Insurance) scheme, 0.65% to EPF administrative charges and 0.01% towards administrative charges of EDLI which sums a total of 13.16% contribution.

The PF contribution of employee and employer 2017 is 12% of employee basic directly to PF account whereas Employers 13.16 percent is divided into 8.33% for the pension fund and 3.67% for PF along with 1.16% of administrative charges. Even if the employee increases his/her contribution rate from 12 %, the employer's contribution rate is fixed and stable.

The EPF contribution rate 2017-18 is revised on the circular dated 1st April 2017 with a reduction of EPF admin charges from 0.85% to 0.65% is marked at 12% for employee and 13.16% for employer. Recently it is notified that the EPF admin charges are reduced to 0.50% w.e.f, 1st June 2018. A basic of 10 % PF contribution by an employee can be applied to the companies with a smaller number of employees (ie., <20 employees). After the deduction of EPF admin charges in June 2018, the employer's contribution to PF is marked at 13.01%.

0 Comments on What is Employer Contribution to PF?

Comment as a guest:


What is Appointment letter Format?

26th Jun 2018

Top 10 facts why you need a cover letter?

08th Jun 2018

Are you looking for a job in Event Management?

28th May 2018

Pharmaceutical job opportunities on rise in Gulf

23rd May 2018

MNC Vs Startup: Are you Confused to Choose between?

09th Aug 2017

Perspectives of Unemployment in India

01st Jul 2013

Have your Say!

View All

How consistently does your organization reward you for good work?

Very difficult

Reasonably consistently

Not at all consistently


Press Corner

View All

All rights reserved © 2020 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status