Download - Basics of Employee Pf
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- Charan & Shiwang
Basics of Employee ProvidentFund
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EPF
A provident fund is created with a purpose ofproviding financial security and stability to elderly
people.
Generally one contributes in these funds when
one starts as employee, the contributions are
made on a regular basis (monthly in most
cases).
Itspurpose is to help employees save a fraction
of their salary every month, to be used in an
event that the employee is temporarily or no
longer fit to work or at retirement.
The investments made by a number of people /em lo ees are ooled to ether and invested b a
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EPF
A provident fund is created with a purpose ofproviding financial security and stability to elderly
people.
Generally one contributes in these funds when
one starts as employee, the contributions are
made on a regular basis (monthly in most
cases).
Itspurpose is to help employees save a fraction
of their salary every month, to be used in an
event that the employee is temporarily or no
longer fit to work or at retirement.
The investments made by a number of people /em lo ees are ooled to ether and invested b a
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EPS
Emp loyee Provident Fund (EPF)isimplemented by the Employees Provident Fund
Organisation (EPFO) of India. An establishment
with 20 or more workers working should register
with EPFO.
Typically 12% of the Basic, DA, and cash value of
food allowances has to be contributed to the EPF
account.
EPFO is a statutorybody of the Indian
Government under Labour and Employment
Ministry. It is one of the largest social security
organisations in the world in terms of members
and volume of financial transactions undertaken.
http://www.merriam-webster.com/dictionary/statutoryhttp://www.merriam-webster.com/dictionary/statutory -
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EDLIS - Employees Deposit Linked
Insurance Scheme (EDLIS)
Under the EDLI scheme life insurance cover isprovided to the PF members. The cost of thescheme is borne by the employer but as theamount of life coverage under this statutory
scheme is very low (a maximum amount of Rs.60,000), usually employers opt out of the EDLIscheme by going for group insurance schemewhich usually provides higher coverage toemployees without any increase in cost to the
employer. EPF, EPS and EDLIS are calculated on Basic
salary, Dearness allowances(DA), cash value offood concession and retaining allowances if any.
Most of the organizations follow Basic+ DA
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Rates of contribution of EPF, EPS,
EDLI, Admin charges in India.
Note : In industries like beedi, jute, guar gum factories, coir
industry (other than spinning sector) the Employee contribution is
10% while employerscontribution is 1.67%.
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Changes September 2014 The statutory wage ceiling under the EPF, EPS and
EDLI has been increased from INR 6,500 to INR15,000 per month.
For the financial year 2014-15, the minimum pensionis fixed at INR 1,000/ month for the members of theEPS or their nominee/ widow, etc.
Effective September, 1, 2014, all new EPF membersshall not become a member of EPS, if their pay ismore than INR 15,000/ month at the time of joining. In
other words, no allocation towards pension fund willbe made for such new members and the entireemployee and employer contribution will go to theprovident fund account.
The insurance benefit under the EDLI has been
increased by 20% in addition to the existing