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Employee Provident Fund administrative charges have been reduced from 0.65% to 0.50% with effect from 1 June 2018. Thus, provident fund charges, starting 1 June 2018 shall be as follows

  • Administrative charge for Provident Fund – 0.50% of basic pay or Rs. 500, whichever is higher.
  • Administrative charge for Deposit Linked Insurance – NIL (w.e.f 1 April 2017)

There have been changes in the provident fund contribution rates recently. The present rates are as follows

Employee contribution

  • Standard rate of 12% of basic wages
  • Reduced rate of
    • 10% of basic wages for, inter alia, an establishment where less than 20 employees are employed or for any sick industrial company as declared by BIRF
    • 8% for first time women employees for the first year of their employment

Employer contribution

  • 8.33% of basic wages to the Employee Pension Scheme (please see further notes below)
  • 0.5% of basic wages to Employee Deposit Linked Insurance Scheme (limited to wage ceiling of Rs. 15,000)
  • Difference between employee contribution and sum total of above contributions shall be deposited to the Employee Provident Fund.

Employer administrative charges

  • 0.5% of basic wages or Rs. 500, whichever is higher towards provident fund administrative charges (w.e.f. 1 June 2018)
  • Administrative charges towards Employee Linked Deposit Insurance Scheme has been abolished w.e.f 1 April 2017.

Further, please note that

  • Contributions are payable on a maximum basic wage ceiling of Rs. 15,000 per month.
  • Employees can choose to contribute on higher or full basic wages, but the employer is not obliged to contribute at the same rate. The employer would however be liable to pay administrative charges at such higher rate.
  • The ceiling of Rs. 15,000 / month does not apply to International Workers.
  • Contribution to the Employee Pension Scheme shall be NIL & entire contribution shall be deposited into provident fund in the following cases
    • When the employee cross the age of 58 years and is in service, or
    • For an employee who has enrolled to the PF scheme for the first time after 1 September 2014 (i.e. not an existing member on that date), earning basic wages more than Rs. 15,000 per month.

In case of any questions, please do not hesitate to reach out to us on pavan@bclindia.in or write to us on bclindia.in/contact/. We would be glad to be of your assistance.

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