💰 EPF Salary Deduction: How Much Is Currently Deducted and What’s Changing?
The Employees’ Provident Fund (EPF) is one of the most important retirement savings schemes in India. Both employees and employers contribute a portion of the salary to secure the future. Here’s what you need to know about current deductions and upcoming changes.🔹 1. Current EPF Deduction RulesCurrently, the Employee Provident Fund Organization (EPFO) sets a salary ceiling of ₹15,000 per month for mandatory contributions. This means:· Employee contributes 12% of basic salary + dearness allowance.· Employer also contributes 12%, with 8.33% going toward the Employees’ Pension Scheme (EPS) and the rest to EPF.Example:
If your basic salary is ₹15,000:· Employee contribution = ₹1,800/month· Employer contribution = ₹1,800/month (₹1,250 to EPS, ₹550 to EPF)🔹 2. Proposed Salary Ceiling IncreaseThe EPFO is planning to increase the salary limit from ₹15,000 to ₹25,000 per month. This means employees earning up to ₹25,000 will now have mandatory PF deductions.Impact:· Higher contributions for employees with salaries above ₹15,000.· Increased retirement corpus and pension benefits over time.🔹 3. Benefits of the Increase1. Higher Retirement Savings – A bigger portion of your salary will go into EPF, building a stronger corpus.2. Higher Pension Under EPS – As the employer’s contribution to EPS increases, monthly pension after retirement also increases.3. Tax Benefits – Contributions to EPF are eligible for tax deduction under Section 80C.🔹 4. Who Will Be Affected?· Employees with a basic salary above ₹15,000.· Employers will also need to contribute more, slightly increasing their monthly expense.🔹 5. Key TakeawayThe EPFO’s proposal to raise the salary ceiling ensures that more employees benefit from higher retirement savings and pension. While it increases monthly deductions, the long-term gains in retirement security make it worthwhile. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
If your basic salary is ₹15,000:· Employee contribution = ₹1,800/month· Employer contribution = ₹1,800/month (₹1,250 to EPS, ₹550 to EPF)🔹 2. Proposed Salary Ceiling IncreaseThe EPFO is planning to increase the salary limit from ₹15,000 to ₹25,000 per month. This means employees earning up to ₹25,000 will now have mandatory PF deductions.Impact:· Higher contributions for employees with salaries above ₹15,000.· Increased retirement corpus and pension benefits over time.🔹 3. Benefits of the Increase1. Higher Retirement Savings – A bigger portion of your salary will go into EPF, building a stronger corpus.2. Higher Pension Under EPS – As the employer’s contribution to EPS increases, monthly pension after retirement also increases.3. Tax Benefits – Contributions to EPF are eligible for tax deduction under Section 80C.🔹 4. Who Will Be Affected?· Employees with a basic salary above ₹15,000.· Employers will also need to contribute more, slightly increasing their monthly expense.🔹 5. Key TakeawayThe EPFO’s proposal to raise the salary ceiling ensures that more employees benefit from higher retirement savings and pension. While it increases monthly deductions, the long-term gains in retirement security make it worthwhile. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.