An Overview of announcement by honorable finance minister Nirmala Sitharaman on Wednesday 13/05/2020 regarding EPF contribution by which EPF Contribution was reduced for Employers and Employees for 3 months to 10% from 12% for all establishments covered by EPFO for next 3 months i.e. May 20, June 20 & July 20.
Union finance minister Nirmala Sitharaman on 13.05.2020 announced the statutory provident fund or PF contribution of both employer and employee will be reduced to 10% each from existing 12% each for all establishments covered by EPFO for the next three months i.e. May 2020, June 2020 & July 2020.
Let’s understand with charts:-
| Account Head | Upto wage month April 2020 | From wages months May 2020 to July 2020 |
| Employee’s PF Contribution – A/c No: 1 | 12% | 10% |
| Employer’s PF Contribution – A/c No: 1 | 3.67% (12%-8.33%) | 1.67% (10%-8.33%) |
| Employer’s EPS Contribution – A/c No: 10 | 8.33% | 8.33% |
| EDLI Contribution – A/c No: 21 | 0.50% | 0.50% |
| Administrative Charges – A/c No: 2 | 0.50% (Minimum Rs. 500/-) | 0.50% (Minimum Rs. 500/-) |
| No change in inspection charges in A/c No. 22 in respect of EDLI exempted establishments. | ||
Example for PF Wage Rs.10,000/-
| Account Head | April 20 | May to July 20 |
| EE PF (A/c # 1) | 1,200/- | 1,000/- |
| ER PF (A/c # 2) | 367/- (1200-833) | 167/- (1000-833) |
| ER EPS (A/c 10) | 833/- | 833/- |
| ER EDLI (A/c 21)* | 50/- | 50/- |
| ER ADMIN (A/c 21)* | 50/- | 50/- |
| Effective CTC | 11,300/- | 11,100/- |
| Effective % | 25% | 21% |
*EDLI & Admin are notional only as they are calculated on overall challan value.
*Take Home Salary increase for employee but CTC reduces.
Some Frequently Ask Questions (FAQ):-
Q 1. Applicability of the announcement?
Ans: Applicable on all establishment except
a) Central and State Public Sector enterprises
b) Establishments owned or controlled of Central Government or State Government.
c) Establishments eligible for PMGKY benefits i.e. Where employees and employers contribution to be paid by Government
Q 2. Applicable in the months of?
Ans:
a) May 2020 paid in June 2020
b) June 2020 paid in July 2020
c) July 2020 paid in August 2020
Q 3. For Fixed CTC what needs to be done?
Ans: The difference in employer share (2%) needs to be paid to employees.
Q 4. Can Employer / Employee pay at higher rate?
Ans: Yes
Q 5. Will it impact pension?
Ans: No, Pension remains 8.33%
Q 6. What if ECR not submitted on time?
Ans: No Problem
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Hi Sir,
My basic is 40,000 per month. My company is deducting 4,800 from my salary and contributing 2550 from company (part of ctc only) end to my PF account (total 4800+2550=7350).
They are not considering ceiling wage of 15,000. Is this legally right or can I request for contributing only 1,800 from my end? Pls clarify.
what is the extension dates of payments for epf in april 20,may20 june 20 by employer
Dear Sir,
I want to know if our All Employees PF admin charges is Rs. 499, How much wil be pad the same.
If our All Employees PF Admin charges is Rs. 4034,How much will be paid.
Plz answer the earliest.
Thanks
If there is all members salary is more than 15000, is it mandatory to deposit in EDLI scheme for those employees?
how to calculate pf whose salary are grater than Rs 1 lakes
Hi, Rajbahadur
Calculate pf either on Rs.15000/- i.e. PF contribution will be 1,800/- employer and employee each or calculate as per employee agree for voluntary contribution.
Respected Sir,
Good Evening,
Sir I request to you please send me PF contribution notice under covid 19. ( Contributions Month – May , June July )
my mail id – sakpalavinash46@gmail.com
Sent on your mail.
for Administrative charges AC-2 which is 0.5% (minimum Rs. 500) – my question is our adm. charges doesn’t go above Rs.300.. so what to do now??? can anybody help me in this matter?? i am not able to generate challan.
Hi, Rahul
in this case if your charges is not more than Rs.300/- in that case you have to enter minimum amount of Rs.500/-
Sir please give me updates
This article is very informative, and updated
What a useful information provided by this blog! It’s remarkable. Thanks for sharing!
I want to know that whether I mayane clea I have being paid by firm salary more that 21000 but the firm is not disbursing ER – EPF SUBSCRIPTION into my account and insisting for form11 from me, so that the firm may exempted for ER SHARE, however the same
PLEASE CLARIFY WHETHER I BE ELLIGBE
For exemption of my villahe
Employer Contribution 13% (or) 12.5%
how much percentage sir
3.67%+8.33+0.50=12.50%
3.67%+8.33+0.50+0.50=13%
It’s 13%
i.e. 3.67%+8.33+0.50+0.50=13%
Sir please tell about esi rate and calculation
ESIC contribution rates (w.e.f. 01/07/2019)
Particulars Current Rate
Employer Share 3.25%
Employee Share 0.75%
how to gain income tax return knowledge
sir Sep 2020 month Employer Contribution rate please send sir.
sir, September 2020 month employer contribution rate please send me sir
sir. pl. send my mail id pf contribution march-2020 to august – 2020 march to may 12×2=24% and jun to august 10×2 =20% passed by gov. approved copy pdf file cercullar send my mail id pl.. sir
Let’s understand with charts:-
Employee’s PF Contribution – A/c No: 1 – 12%
Employer’s PF Contribution – A/c No: 1 – 3.67% (12%-8.33%)
Employer’s EPS Contribution – A/c No: 10 – 8.33%
EDLI Contribution – A/c No: 21 – 0.50%
Administrative Charges – A/c No: 2 – 0.50% (Minimum Rs. 500/-)
No change in inspection charges in A/c No. 22 in respect of EDLI exempted establishments.
Hi……
Babasaheb…Pls read carefully from the starting.
Let’s understand with charts:-
Account Head Upto wage month April 2020 From wages months May 2020 to July 2020
Employee’s PF Contribution – A/c No: 1 12% 10%
Employer’s PF Contribution – A/c No: 1 3.67% (12%-8.33%) 1.67% (10%-8.33%)
Employer’s EPS Contribution – A/c No: 10 8.33% 8.33%
EDLI Contribution – A/c No: 21 0.50% 0.50%
Administrative Charges – A/c No: 2 0.50% (Minimum Rs. 500/-) 0.50% (Minimum Rs. 500/-)
No change in inspection charges in A/c No. 22 in respect of EDLI exempted establishments.
PLZ PF CONTRIBUTION RATE.1.4.20
AC NO.1.
AC NO.2
AC NO.10
AC NO21
AC NO.22. PL SEND