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

 

PF CASES.jpg

 

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 

  1 pf-image-2.png


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

EPS Amount

View Answer

Difference Amount

View Answer

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?

View Answer

EXAMPLE 2

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

View Answer

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    
View Answer

Question 2

What is EPF Wages?

View Answer

Question 3

What is EPS Wages?

View Answer

Other Charges Paid by Employer

PF.jpg

                                                                Note:-Total here means total of all employees


What are PF Admin Charges?

View Answer

What are EDLI Charges and EDLI Admin Charges?

View Answer

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?

View Answer

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

View Answer

Is EPF Rate Always 12%?

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

View Answer

In what cases EPS is not applicable

View Answer
  1. Tax Practical
  2. Practical Payroll (TDS Salary,PF,ESI)

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .