PF Under COVID-19: Applicability and Contribution Details

Published On: Apr 13, 2020Last Updated: Oct 14, 20232.9 min read

India’s Finance Minister, Nirmala Sitharaman announced on 26 March about PF relief for both – employees and the employer, in the situation of COVID-19 & 21 days lockdown.

  • The government of India would pay a total of 24% of the contribution on behalf of 12% of the employer and 12% of the employee.
  • 90 percent of those with a workforce of up to 100 and of those 100 who earn less than 15,000 p.m.
  • EPFO Regulation is amended Up to 75% or 3 months of fewer wages can be withheld by an employee. Non- advances are only allowed for other reasons including lodging, marriage, etc. Those are also allowed when the employee has reached a minimum duration of service.
  • The government has also announced a 1.70 lakh crore economic package for a host of beneficiaries in the wake of COVID 19 spread that has crippled economic activity and wages across sectors.

Provident Fund applicability and contribution

EPF registration is compulsory for all institutions with 20 or more individuals and an employee’s salary of 15000/- or less.

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Companies with less than 20 workers may also voluntarily sign. When you receive a salary above Rs. 15,000 per month, you are considered a non-eligible employee and you are not allowed to become an EPF member, although you can still enroll with your employer’s permission and the assistant PF Commissioner’s approval.

Employees Provident Fund is an employee and employer contributions fund. Whereas the ESI program focuses on benefits, the fund focuses on post-compensation and advantages. PF is a brilliant government program to build a future saving habit. It’s a perfect opportunity for retirement. In an extra benefit, tax deductions of up to Rs. 1.50 Lakhs are to be provided under section 80(c) and 8.75% interest rate. To EPF, the employee and the employer must contribute 12% of the employee’s monthly salary. Employees may voluntarily contribute more than 12 percent of their salaries, however, employers are not obligated to repay the employee’s additional contribution.

An employee’s salary will include the following as a part of the PF contribution apart from Basic Wages:

  • Special Allowance
  • Dearness Allowances (DA)
  • Conveyance Allowance and

The monthly contribution from the employer shall be a total of Rs 1,800. If the employee’s salary is higher than Rs 15,000, only Rs 1,800 (12% of Rs 15,000) is eligible to be paid.

Details of EPF Contribution

There are some lesser-known facts about PF contribution regulatory enforcement.

Employee/employer payments are split into two distinctive funds:

  • EPF (Employee Provident Fund) an
  • EPS (Employee Pension Scheme)
Employee Employer>
Total contribution 12% of monthly salary
12% of monthly salary (subject to a maximum of Rs. 1,800)
Employee Pension Scheme (EPS)
8.33% (of the 12%)
Employee Provident Fund (EPF)Full Amount3.67% (of the 12%)

Example forMonthly Salary: Rs 12,000

Total Contribution 12,000 * 12% = Rs 1,440 12,000 * 12% = Rs 1,440
EPS 0 12,000 * 8.33% = Rs 999.60
EPF Rs 1,440 12,000 * 3.67% = Rs 440.40

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Important PF Reports

PF Monthly report: this report needs to be generated every month and includes the employee information of PF, Employer PF, and PF fundamental for the employee.

Form 5 A: This is a monthly report with a list of all workers who joined the company this month.

Type 10: A monthly report detailing all workers who have quit the company resigned in the current month.

Form 12 A: A monthly report that summarises staff currently covered by the PF, total monthly contribution, and other information.

Form 3A: It is a monthly report which summarises all PF deductions (employee and employer) made for the employee during the particular PF Year.

Form 6A: This is a monthly report that gives the employee a description of Form 3A. This report includes the cumulative deductions charged for each employee in a specific PF year.

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Unnati Vora
About the Author

Unnati Vora

Unnati Vora is an HR & operation executive associated with She has a good knowledge of Labour law compliances.