Centre reduces EPFO contributions from 12 per cent to 10 per cent from May to July this year
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The Centre has notified the reduction in statutory rate of contributions from 12 per cent to 10 per cent for wage months period from May to July, 2020 for all class of establishments covered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 .
Earlier,the government had announced to reduce the rate as part of Atma-Nirbhar Bharat package. Ministry of Labour and Employment in a statement said that the notification in this regard is available on the home page of EPFO website. It said, reduction in rate of EPF contributions from 12 per cent to 10 percent of basic wages and Dearness allowances is intended to benefit both 4.3 Crore employees and employers of 6.5 lakhs establishments to tide over the immediate liquidity crisis to some extent.
As a result of reduction in statutory rate of contributions, the employee will have a higher take home pay and employers will also have their liabilities reduced by 2 per cent of wages of the employees.
The Ministry said, this reduction of rate of contribution is not applicable to establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central or State Government.
These establishments shall continue to contribute 12 per cent of basic wages and dearness allowances.The reduced rate is also not applicable for Pradhan Mantri Garib Kalyan Yojana-PMGKY beneficiaries as the entire employees' EPF contributions of 12 per cent of wages and employers’ EPF & EPS contribution of 12 per cent of wages totaling 24 per cent of the monthly wages is being contributed by the Central Government. #casansaar (Source - NewsOnAir)
Earlier,the government had announced to reduce the rate as part of Atma-Nirbhar Bharat package. Ministry of Labour and Employment in a statement said that the notification in this regard is available on the home page of EPFO website. It said, reduction in rate of EPF contributions from 12 per cent to 10 percent of basic wages and Dearness allowances is intended to benefit both 4.3 Crore employees and employers of 6.5 lakhs establishments to tide over the immediate liquidity crisis to some extent.
As a result of reduction in statutory rate of contributions, the employee will have a higher take home pay and employers will also have their liabilities reduced by 2 per cent of wages of the employees.
The Ministry said, this reduction of rate of contribution is not applicable to establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central or State Government.
These establishments shall continue to contribute 12 per cent of basic wages and dearness allowances.The reduced rate is also not applicable for Pradhan Mantri Garib Kalyan Yojana-PMGKY beneficiaries as the entire employees' EPF contributions of 12 per cent of wages and employers’ EPF & EPS contribution of 12 per cent of wages totaling 24 per cent of the monthly wages is being contributed by the Central Government. #casansaar (Source - NewsOnAir)
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