EPFO News: The central government can increase the minimum basic salary limit for contribution to the Employees’ Provident Fund (EPF). It can be increased from Rs 15,000 to Rs 25,000. The Ministry of Labor and Employment has prepared a proposal for this. It is believed that it can be announced in the budget to be presented on July 23.
Preparations to amend the rules after 10 years
It is being told that the ministry is preparing to amend the rules after 10 years to increase the social security scope of employees. Earlier on 01 September 2014, the salary limit was increased from Rs 6,500 to Rs 15,000. However, in contrast, the salary limit in the Employees State Insurance Corporation (ESIC) is higher than this. There is a high salary limit of ₹ 21,000 since 2017 and there is a consensus within the government that the salary limit should be made the same under the two social security schemes.
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How much contribution now
Under the current rules, both the employee and the employer contribute equally to the EPF account – 12 per cent each of the basic salary, dearness allowance and retaining allowance (if any). While the entire employee’s contribution is deposited in the provident fund account, 8.33 per cent of the employer’s contribution goes to the Employees’ Pension Scheme and the remaining 3.67 per cent is deposited in the PF account.
Contribution to pension fund will increase
Currently, when the basic pay limit is Rs 15,000, the contribution of the employee and the employer is Rs 1800 each. Out of the employer’s contribution, Rs 1,250 goes to the Employees’ Pension Scheme (EPS). The remaining Rs 750 goes to the PF account. When the basic salary limit is Rs 25,000, the contribution of each will become Rs 3000. Then out of the employer’s contribution, Rs 2082.5 will go to the pension fund and Rs 917.5 to the PF account.
