Employer’s Contribution towards EPF- 12% or 13%?

Ask the Community Income Tax
1

Hi Community-

In general, provident fund contribution from both employee & employer is 12% & 12%. Correct!

In some articles, I read its 13% for employer as well.

  1. Which one is the actually correct?
  2. Why is there a different percentage contribution stated in various places?
  3. Also, does this need us to be careful in ways we manage pf contributions?

Please add some clarity to this question.

Regards,
Jyoti

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2

Hi Jyoti,

The PF Employer and Employee contribution is 12% .

  1. 12% is correct.
  2. As per me and experience its 12% all over India. There is no variations state to state.
  3. If you are deducting 12% , no need to be worry because you are deducting correct.

Hope this information will help you.

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3

Hi Jyoti,

Please see the below link of PF FAQ’s. Hope this will help.

PF Contribution and Reports

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4

In other words, some people say it as employer pf conttribution is 13% which can be explained as below
Employer contribution : 12%
Account No 2 : PF Admin Charges - 0.5%
Account No 21 : EDLI (Pensionable salary of EDLI Contribution - 0.5%

Clubbing all together some read/write as Employer Contribution is 13%
Employer contribution is always 12% till further gazette notification from EPFO
Ealrier it was 8.33% in Jammu & Kashmir but it was changed to 12% from October 25th 2012. Please refer to the gazette notification

P.F NOTIFICATION1
P.F NOTIFICATION12552×3506 806 KB
P.F NOTIFICATION2
P.F NOTIFICATION22552×3506 753 KB

[Moderator Edit- Vidyaranjan- upload broken images]

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5

Hi Jyoti,

Contribution is 12 % & 12% only. Additional 0.5% is on Admin Charges and 0.5% for EDLI.

PF is central Act so no variations statewise.

Some Companies use 13% as Employer Contribution in CTC breakup and some use 12 % in CTC breakup & 1% towards EDLI & Admin charges is borne by the company.

From Employee perspective, 12% & 12% is right as this will be added to his fund balance

EMPLOYEE PF CONTRIBUTION - 12% OF WAGES
EMPLOYER PENSION CONTRIBUTION - 8.33% OF WAGES; MAX UPTO 1250
EMPLOYER PF CONTRIBUTION - 12% OF WAGES MINUS EMPLOYER PENSION CONTRIBUTION
EMPLOYER EDLI CONTRIBUTION - 0.5% OF WAGES; MAX RS 75
EMPLOYER ADMIN CHARGES - 0.5% OF WAGES

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