EPF contributions will be deducted at old rates, at 12% from Aug 1, 2020
The government had cut EPF contribution, as a part of the relief measures that were announced by the FM to help both employees and employers to sail through the COVID crisis. Now from next month, the deductions will revert to old levels.
As part of relief measures, in the month of May, Finance Minister Nirmala Sitharaman announced that monthly EPF contributions (of both employers and employees) were to be reduced from 24 per cent to 20 per cent for the months of May, June and July 2020.
The government had cut the mandatory contribution to EPF by a total of 4% for three months. The statutory deduction was cut by a total of 4% (2% of the employer’s contribution and 2% of employee’s contribution). Now from the next month onwards (1 Aug 2020), the deductions will revert to old levels, 12% EPF contribution for each Employer and Employee.
Out of the total 24 per cent contribution, the employee’s share (i.e., 12 per cent) and employer’s 3.67 per cent goes to the EPF account, while the remaining 8.33 per cent of the employer’s share is diverted to the Employees’ Pension Scheme (EPS) account.
