Employee Provident Fund Organization of India is planning to make EPF contribution rate 10% in order to increase the take home salary of employees. At present the EPF contribution rate is 12% i.e employee contributes 12% of his or her basic salary + dearness allowances towards EPF and employer also contributes 12% towards EPFO in which 3.67% will go to PF contribution and 8.33% will go to pension.
EPFO Planning To Make EPF Contribution Rate 10%
The proposal to make EPF contribution rate 10% was held in the meeting agenda of Employee Provident Fund Organization, which is going to be held on 27 May 2017 at Pune. EPFO is receiving number of representations to reduce the mandatory EPF contribution to 10% from 12%.
The main reason behind this proposal is to increase the take home salary of employees. EPFO wants employees of all organizations to get more take home salary for their expenditures. But at the same time there are so many labour unions are opposing this proposal. If EPFO makes EPF contribution rate 10% then it will definitely impact the main aim of this social security scheme.
Present EPF Contribution Rate
|Employee Contribution||Employer Conribution|
|PF 12%||PF 3.67%|
|–||Admin Charges 0.65%|
|–||EDLI charges 0.5%|
Recently employee provident fund organization has reduced the PF admin charges to 0.65% from 0.85 % and the same time it has also abolished the EDLI admin charges of 0.01%. Day by day EPFO is taking employee favorable steps to improve this social security scheme like implementation of single page EPF Composite claim forms and online EPF withdrawal platform etc.
But the labour unions are opposing this proposal that 10% EPF contribution rate is not at all beneficial for employees, it only benefits employers. If government reduces EPF contribution to 10 percent then it will effects the social security of employee whose monthly basic wages is less than 15000 Rs.
Do share your opinions on proposal of Employee Provident Fund Organization to reduce the EPF contribution to 10 percent.