EPF

The Epf& MP (Miscellaneous provision act) act was came in to existence from March 14 th 1952.
The act is applicable all over India except the
state of Jammu and Kashmir.
Presently the following three schemes are providing toemployees under this act.
Employee
1. provident fund scheme (EPF) 1952.
2. Employees’ pension scheme (EPS) 1995
3. Employees deposit linked insurance (EDLIS) 1976.

An establishment with 20 or more workers should register with Employees provident fund organization which comes under any of the 180 industries mentioned.
Even though there are certainexemptions are there will be discussed in another post.

Here we mainly aimed for EPF rates and its calculation.
EPF, EPS, EDLIS rates in India
EPF, EPS and EDLIS are calculated on Basic salary, dearnessallowances, cash value of food concession and retaining allowances if any.
“Retaining allowances means an allowance payable for the time being to an employee of any factory or other establishment during any period in
which the establishment is not working, for retaining his services.”

Most of the organizations are following Basic+ DA Method. Below table tells you the rates of contribution of EPF, EPS, EDLI, Admin charges in India.

Scheme Name Employee contribution Employer contribution Paid to A/c No:

Inspection charges payable by employer
Inspection charges must be paid by the employer in the following Cases.
Some establishment are exempted from EDLI contribution as they are providing the same nature of benefit without any contributions from
employee, such establishments are liable to pay 0.005% on Basic salary
1.The establishments exempted under the scheme should pay 0.18% of Basic salary t 2. owards inspection charges.

CONTRIBUTION OF EMPLOYERS
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA ,
Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month.
Voluntary higher contributions are also acceptable at the joint request of the member and the employer .
However, the rate of contribution is 10% in respect of the following categories of establishments:
Any establishment covered prior to 22.9.97 in which less than 20 persons are employed.
Any sick industrial company as defined in Clause(0) of Sub-Section(1) of Section 3 of the sick
industrial companies ( special provisions ) Act 1985 and which has been declared as such by the
Board for Industrial and Financial Reconstruction.
Any Establishment which has at the end of any financial year accumulated losses equal to or
exceeding its entire net worth.
Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than
spinning sector), (e) Guar Gum Industries/Factories.
b) The Employees' Pension Scheme
From and out of employer's share of Provident Fund contributions 8.33% of the total wages limited to Rs.
6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10
( w.e.f.1-06-2001 ).

The Central Government also would contribute at the rate of 1.1 / 6% of total wages.

c) Employees' Deposit Linked Insurance Scheme:
No amount is recovered from employee's wages . Employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month ( w.e.f. 1-06-2001 ).