Thursday, 21 May 2020

REDUCTION IN STATUTORY RATE OF CONTRIBUTIONS FROM 12% TO 10%



Attention is invited to the Gazette Notification - Reduction of statutory contribution rate from 12% to 10% for the wage months May, June & July 2020 vide Notification CG-DL-E-18052020-219425 dated 18.05.2020

Notification Guidelines:

As part of the government's Rs 20 lakh crore stimulus package, EPF contribution of both employer and employee has been reduced to 10 percent of basic wages and dearness allowances from existing rate of 12 percent for all class of establishments covered under the EPF & MP Act, 1952 for three months, May, June, July 2020

The reduction in statutory rate of contributions from 12% to 10% for wage months May, 2020, June, 2020 and July, 2020 for all class of establishments covered under the EPF & MP Act, 1952 announced on 13.05.2020 by the Central Govt. as part of Atma-Nirbhar Bharat package has been notified vide SO 1513 (E) dated 18.05.2020 published in the
Gazette of India.

Applicability:

It is applicable to all class of establishments covered under the EPF & MP Act, 1952 and exempted establishments. The establishment availing PMRPY benefits can remit contribution at reduced rate.

The establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central Govt. or State Govt shall not be applicable.

This clause shall not be applicable to the establishments eligible for relief under the Pradhan Mantri Garib Kalyan Yojana guidelines issued by the Employees’ Provident Fund Organization vide its Office Memorandum No.C-1/Misc./2020-21/Vol.II/Pt. dated 9th April, 2020 The Establishments covered during wage months of May-July, 2020 will be eligible for reduced rate for eligible remaining period from date of coverage.

Contribution Rate Summary:
Account Head
Upto wage month April 2020
From wage months May 2020 to July 2020
Employee’s PF Contribution – A/c.No: 1
12%
10%
Employer’s PF Contribution – A/c.No: 1
3.67% (12%-8.33%)
1.67% (10%-8.33%)
Employer’s EPS Contribution – A/c.No: 10
8.33%
8.33%
EDLI Contribution - A/c.No: 21
0.50%
0.50%
Administrative Charges – A/c.No: 2
0.50% (Mini.Rs.500/-)
0.50% (Mini.Rs.500/-)
No change in inspection charges in A/c.No.22 in respect of EDLI exempted establishments



Please Note: The reduced rate of contribution (10%) is minimum rate of contribution during period of the package. The employer, employee or both can contribute at higher rate also. 

Please refer the FAQ_EPFO on Reduced rate of Contribution Dt:20/05/2020.

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