“Employees Provident Fund”

EPF Contribution and Calculation

Employees Provident Fund (EPF) is an integral part of the retirement planning process for employees in India. It is a mandatory social security scheme administered by the Employees Provident Fund Organisation of India (EPFO).

Under the EPF scheme, employers under the coverage of the EPFO are required to contribute 12% of their employee’s basic pay plus dearness allowance on monthly basis to the EPF account of their employees.

Employees are also required to contribute 12% of their basic pay plus dearness allowance towards their EPF account. This is known as Employee’s Provident Fund (EPF) contribution. Out of the 12%, 8.33% is diverted to the Pension Scheme of the EPFO, also known as the Employees Pension Scheme (EPS).

The total contribution towards an EPF account is calculated on the basis of the Basic Pay plus Dearness Allowance as well as the entry base of the employee. The entry base defines the minimum wages to be granted to the employees and is increased from time to time. The total EPF contribution is 14.67% of the wages (Basic+DA) or high of Rs.15,000, whichever is lower.

The Employer’s contribution (12% of Basic+DA) is deposited directly into the EPF account of the employee while the employee’s contribution is collected by the employer from the salary of the employee and is then remitted to the EPF account before the 10th of every month. Understanding the structure of basic salary in India is crucial, as it forms the basis for calculating both the employer’s and the employee’s contributions to the EPF account.

EPF Interest Rates and Taxation

The Employees Provident Fund enjoys competitive interest rates compared to other investment options available in the market. The Employees Provident Fund interest rate is set or revised by the Central Government in consultation with the Employees Provident Fund Organisation of India.

The EPF Interest rate applicable for FY 2020-21 is 8.50%. The EPFO offers a number of options for EPF contributions, including the Minimum Pension Scheme (MPS), which offers an even higher interest rate depending on your contribution amount.

EPF withdrawals are also partially or fully tax exempt from taxes under the Income Tax Act 1961. Employers and Employees must deduct TDS at the rate of 10% of the total contribution from the provident fund account. This is applicable for any withdrawal made after the continuous service of 5 years or more.

What Are the Online EPF Services?

The EPFO offers a suite of online services to help employees with their EPF related needs. Employees can access their EPF account statements online, view their contribution details and interest rates, transfer their accounts to another establishment, file claims for disbursement of their EPF balances, view nomination and update personal information and more.

FAQs

What should I do if I forget my EPF login password?

In case you have forgotten your EPF login password, you can reset it online by visiting the unified portal of the EPFO. Just click on the ‘forgot password’ option and enter the credentials for identity verification. Following that, a new password will be sent to your registered email address or mobile number.

How can I change my registered mobile number for EPF login?

You can easily change the registered mobile number for EPF login by visiting the unified portal of the EPFO. You just need to click on the ‘change contact number’ option, enter the new details and get the OTP to complete the process.

What is the difference between UAN and EPF login?

UAN stands for the Universal Account Number which is allotted to every EPF account holder. On the other hand, EPF login is done using credentials such as username and password. The UAN helps in maintaining the identity of the account holder while the EPF login helps to access provident fund details online.