Govt. Declares 3- Month Reduction in EPF Contribution for Companies

On 13th May 2020, the Government announced a reduction in the EPF contribution rate from 24% to 20% of the salary, for private sector firms, for the next three months. As a consequence of this change, it is believed that employees will be able to benefit from a higher take-home salary and employees will be slightly relieved from payments of provident fund dues. 

Besides this, under Pradhan Mantri Garib Kalyan Yojana (PMGKY), it was announced that the entire EPF contribution made by employers for companies with less than 100 workers will be borne by the government. This was entirely concerned with the companies where a minimum of 90% of workforce is earning less than or equal to Rs.15,000 per month. 

Presently, a total of 24% of employees’ basic salary is deducted (12% each as employee and employer’s share) towards EPF. This is a mandatory condition for all the employees earning up to Rs.15000 per month. Now, the benefit of subsidy will be extended from the month of June to August. 10% each as employee and employer’s share would go towards EPF. 

While announcing the first part of the Atmanirbhar Bharat Abhiyan economic package, the Finance Minister Nirmala Sitharaman said, “This will provide liquidity of Rs 6,750 crore to employers and employees over three months and will give relief to about 650,000 establishments and 43 million workers.”

This is an interim change which will not bring any changes to the EPF Act, 1952. Nonetheless, this reduced EPF contribution benefit will not be available for the workers who have already registered under and taken benefit from PMGKY.

Source link

Comments (No)

Leave a Reply