Tuesday, May 26, 2020

Reduced PF Rates from 12% to 10%

Rate Reduction: The rate of PF contribution of both employer and employee has been reduced from 12% of basic wages and dearness allowance to 10%

- All class of establishments covered under the EPF & MP Act, 1952
- Not applicable to Public Sector enterprises or any establishment owned/controlled by the govt.
- Not applicable to establishments eligible for PMGKY benefits

Period: Wages for three months of May, June & July 2020

Effect: the Employee shall have a higher take home pay due to reduction in deduction from his pay on account of EPF contributions and employer shall also have his liability reduced by 2% of wages of his employees

Administrative Charges: No change in the EPF administrative charges (0.5% of EPF wages subject to minimum prescribed) and EDLI contributions (0.5% of wages), which continue to be payable by employers.

Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1625152