PF administrative charges

Ask the Community Payroll
1

Hi Community-

We would like to understand more on the administrative charges.

  1. What is PF administrative charges? and other charges to be looked into?
  2. Is there a monthly contribution to be paid as administrative charges? Please share the details.

Please suggest.

Regards,
Anu

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2

  1. EPF administrative charges is 0.5% of EPF Wages

  2. Monthly payable amount under EPF Administrative charges is a minimum of Rs 500. If the establishment has no contributory member in the month, then the minimum administrative charge will be Rs 75

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3

If any company goes for maximum Rs. 1,800 PF contribution and if employee wants to go for additional PF employee contribution upto Rs. 25,000 for the year, then -

  1. What would be the additional administrative charges

  2. Can company ask employee to bear this additional administrative charges?

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4

HI,

An employee can go upto or equal to his (Basic).

PF deduction of 12% and remaining under VPF criteria. Your admin charges are not depend on employee wise it is as whole company.

And, there is no admin charges on VPF., so you will have to pay what is actually needs to be paid “Admin Charges” on PF wages.

Hope this information helps your query.

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5

Thanks for the clarification, Arpana. This helps.

@GreytHR Team - As I am new to this - so if employee wants to go for this VPF, then in the GreytHR, where would I find this option? Thanks.

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6

As the name suggests, Voluntary PF is PF contribution by an employee, over and above the mandatory deduction (i.e. over and above the percentage specified by the government). Generally, an employee indicates to the company or payroll people a willingness to contribute to VPF. In this case, the VPF deduction is done. This deduction is purely from the employee’s perspective and the employer has no connection to this.

We request you to contact Support team so they will help you in configuring the VPF and also would like to ask you to verify whether VPF component is available under Total deduction in salary page or in IT declaration page,If yes you can add VPF contribution accordingly otherwise contact support.

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7

Please check linK related to admin Rate change:
https://epfindia.gov.in/site_docs/PDFs/Circulars/Y2016-2017/WSU_F&A_ADmCharges_33959.pdf

Rate of admin charges payable by employer under EPF Scheme reduced to 0.50% - 2018 The Ministry of Labour and Employment has reduced the rate of administrative charges payable by the employer under Employees’ Provident Fund Scheme (EPFS) to 0.50 per cent.

The rates have been reduced from existing 0.65% to 0.50% and the proposed change is applicable with effect from June 1, 2018.

Monthly payable amount under EPF Administrative charges is a minimum of Rs 500 is payable. If the establishment has no contributory member in the month, the minimum administrative charge will be Rs 75.

According to the notification, after the amendments, the present rate of contribution under Provident Fund will be

|Employees’ Provident Fund|3.67%|
|Employees’ Pension Scheme|8.33%|
Employees Deposit Linked Insurance Scheme (EDLI)|0.50%|
|Administrative Charges under Employees’ Provident Fund Scheme|0.50%

(w.e.f. 01-06-2018)|
|Total|13.01%|

Employees Provident Fund Scheme (EPF) is the main scheme under The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

It is managed under the aegis of Employees’ Provident Fund Organisation (EPFO).

It covers every establishment in which 20 or more persons are employed and certain organisations are covered, subject to certain conditions and exemptions even if they employ less than 20 persons each.

Under EPF scheme, an employee must pay a certain contribution towards the scheme and an equal contribution is paid by the employer.

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8

Hi @Arpana,

One more query.

Can employee discontinue VPF for sometime and then again continue? For example if employee starts from 1st September 2020 and we deduct the amount suggested by him under VPF. Then he wants to discontinue from 1st January 2021. Then again wants to start from 1st April 2021. Can he do this? Thanks.

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9

Hi Shefali,

Yes you can do it. But I suggest don’t practice this to employees else it will be very difficult to maintain the record and audit purpose.

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10

Thanks, Arpana! You are a gem!

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11

Thanks Shefali… I am happy that I am able to support you.

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12

Hi Arpana,

Is there any separate procedure for employer to register for VPF scheme ? Or does it automatically get covered once the employer registers under EPF scheme? Thanks !

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13

Hi Sanpreet,

Need to take self declaration from the employee.with the contribution % or fixed amout as per standard process.then added at the time of processing for pf ECR.

Regards

Jitendra singh

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14

Dear Jitendra singh

Is there is any separate column in ECR or we can include in PF itself ??

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15

No… You need to add VPF amount in employee PF contribution at the time preparing the ecr.

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