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Coronavirus lockdown | EPF rate cut to benefit employees, employers

The reduction would not be applicable to the Central and State public sector enterprises or any other government-controlled establishment, the EPFO said in a statement. File  

The Employees’ Provident Fund Organisation (EPFO) on Tuesday said the employees’ take-home salaries would increase while the employers’ liabilities would reduce for May, June and July as the Labour Ministry had notified a 2% cut in the EPF contribution rate on Monday.

Also read: No penal proceedings for delay in provident fund contributions during lockdown

Announced as part of the Centre’s economic relief package to deal with the COVID-19 pandemic, the contribution rates for employees and employers had been reduced to 10% of wages plus dearness allowance from 12%. The reduction would not be applicable to the Central and State public sector enterprises or any other government-controlled establishment, the EPFO said in a statement.

“Reduction in rate of EPF contributions from 12% to 10% of basic wages and dearness allowances is intended to benefit both 4.3 crore employees/members and employers of 6.5 lakh establishments to tide over the immediate liquidity crisis to some extent. As a result of reduction in statutory rate of contributions from 12% to 10%, the employee shall have a higher take home pay due to reduction in deduction from his pay on account of EPF contributions and employer shall also have his liability reduced by 2% of wages of his employees,” the EPFO said.


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Printable version | Jun 21, 2021 7:18:41 PM | https://www.thehindu.com/news/national/coronavirus-lockdown-epf-rate-cut-to-benefit-employees-employers/article31625499.ece

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