Contributions to the EPS were not made for two months due to miscalculation. Please let me know what are the consequences of breaks in EPS contribution and how to rectify them.
Hey @accountingservices ,
When there are breaks in EPS (Employee Pension Scheme) contributions, it can have certain consequences and it is important to rectify them. Here are the possible consequences and steps to rectify the situation:
- Consequences of breaks in EPS contribution:
- Impact on pension calculation: The breaks in contributions may affect the calculation of the employee’s pension amount, as the pension is based on the total years of service and the average salary during the contributing period.
- Loss of pension benefits: If the breaks are significant, it may lead to a reduction in the overall pension benefits that the employee would have been entitled to.
- Rectifying the breaks in EPS contribution:
- Identify the duration and reason for the breaks: Determine the exact period during which the EPS contributions were not made and analyze the reasons behind the lapses.
- Calculate the missed contributions: Calculate the missed EPS contributions for the period of the breaks.
- Make the necessary payments: Pay the missed EPS contributions to the Employee Provident Fund Organization (EPFO) along with any applicable interest or penalties.
- Update the EPS records: Ensure that the EPS records are updated with the correct contribution details to reflect the rectification.
Thank you so much for your clarification.
In the above case we paid the contribution before due date only but whole amount deposited to EPF account only.