PF (Provident Fund)

Tax Practical
Practical Payroll (TDS Salary,PF,ESI)

Here we will learn complete details about PF like what is PF, What are Different Rates of PF like EPF, EPS, Difference, PF Admin Charges, EDLI Admin Charges etc)

#### What is Provident Fund

It is a scheme for the benefit of employees,

In this scheme,

• Certain amount is deducted from employee salary.
• Some amount is also contributed by Employer(Company)
• Both Employer and Employee Contribution is invested
• Every year Interest is earned on amount Contributed.
• Whole Amt (Employer+ Employee + Interest) is received later on retirement etc

#### What are the rates of PF?

Both Employer and Employee Contribute towards PF

#### Employee Contribution to PF

12% of (Basic Salary+ DA)

Note:- In case of Private Companies,there is no DA (Dearness Allowance) ,hence it is 12% of Basic

#### Employer  Contribution

Employer (Company) also contribute 12%

but it goes in 2 heads

• Employee Pension Scheme (EPS) 8.33%
• Difference

Why Employer share is in 2 Parts, EPS and Difference?

EPS Amount

Difference Amount

Example 1

Suppose Basic Salary is 10000

DA is 2000

EPS=8.33% OF 12000=1000

Example 2

Suppose Basic Salary is 100000

DA is 2000

EPS=8.33% OF 15000=1250

### Important Points

EXAMPLE 1

If Basic + DA is upto 10000, Calculate Employee and Employer Contribution?

EXAMPLE 2

If Basic + DA is 2000, Calculate Employee and Employer Contribution?

Question 1

 Particulars Case 1 Case 2 Basic 5000 50000 DA 1000 10000 Special Pay 4000 40000 Total 10000 100000

Calculate the following

 Particulars Case 1 Case 2 Gross Salary EPF EPS Difference Total ER contribution Net Salary EPF Wages EPS wages

Question 2

What is EPF Wages?

Question 3

What is EPS Wages?

#### Other Charges Paid by Employer

Note:-Total here means total of all employees

What are EDLI Charges and EDLI Admin Charges?

### Minimum PF

Note- Some Companies Pay Minimum PF on 15000 only

If Basic + Da is 20000(more than 15000), do Employee and Employer have to pay PF on 15000 or 20000?

However, in Many Companies, Employee and Employer are Paying PF on higher amount of 20000

Is EPF Rate Always 12%?

What are the rules of PF for Workers Employed abrading Foreign Countries?

In what cases EPS is not applicable