As Per New Rules EPF Calculation Formulas On Basic Salary

By | January 15, 2022

As Per New Rules EPF Calculation Formulas On Basic Salary

Check out the new EPF calculation formula and the  entries based on the new calculation formula being added for your EPF Now the complete information about contribution % in the pension fund and the process to calculate For Withdrawl or accumulation return on income given is explained

For the retired employees, EPF is the most important saving and works under EPFO Department For the PF member it is important to know how their PF amount and the interest On accumulated EPF amount is calculated

Or any organization having, merely 20 members it is mandatory to make its contribution in employee EPF Here is the detailed guide on how EPF is being calculated for employees under the new calculation formula

In the current scenario, 15000 is the benchmark salary for any employee If any of the employees get a salary less than 15000 both the employee and the employer have to add on their contribution towards employee PF In case the employee salary doesn’t cross the benchmark of 15000 the employee contribution to the PF would be 12% of the basic salary but the employee’s contribution is divided into following sections

  • In employee’s provident fund 3.67%
  • In employee’s pension scheme 8.33%
  • In employee linked insurance scheme 0.5%
  • In EDLIS administrative Charges 0.01%

Thus by using these factors both employee and the employer contribution towards PF can be checked

Now in case an employee’s basic salary and DA is more than 15000 The employer can calculate his share using these three methods

1st Method-For employees the employer contribution is 12% of basic salary and the employee contribution is 12% of Dearness allowance

2nd Method- Both the share of employees and the employer are the same that is 3.67% of 15000

3rd Method- The employer contribution is 3.67% of 15000 whereas employee contribution is 12% of 15000

These are the calculation in case  the employee sum of basic salary and Dearness allowance is 25000

According to method 1 12% employee contribution which is around 3000 whereas employer contribution as 12% of 25000- If 15000 is the amount 8.33% is around 3000-1250 i.e 1750

In the above examples, employer contribution is even lower than 1750

If any employee withdraws his PF amount upon retirement or he wishes to withdraw after fulfilling service requirements he can do this for construction, marriage, health reasons, or in any reasonable case

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