EPFO may reduce PF contributions, proposed 10% for both employee and the employer


EFPO or Employees’ Provident Fund Organisation has around six crore subscribers and manages a corpus of Rs. 10 lakh crore.

According to the Economic Times, the government is considering to lower the rate of contribution towards the Employees’ Provident Fund (EPF). Currently, the contribution paid by both an employee is 12 percent of basic wages plus dearness allowance plus retaining allowance and the same rate of contribution is payable by the employer as well.

However, trade unions have decided to oppose the proposal saying this will dilute these social security schemes.

IMPACTEmployees’ take home (In-hand) salary will increase, overall CTC may decrease if difference of 2% of Employee Contribution and 2% of Employer Contribution are not adjusted in other salary heads and less Income Tax benefit under section 80C.


  1. This 10% proposal is not at all beneficial to any employee or his widow because the mere basic needs also Cannot be fulfilled with such very very less amount of pension as the cost of living is increasing high day by day. Whereas the contribution should be increased upto 15%from 12% currently


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