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EPFO provisions to increase take home salary to employees, reduce statutory burden on employers

29 Jun 2020 Evaluate
Employees’ Provident Fund Organisation (EPFO) has been consistently doing its bit in these hard times, by reaching out and extending a helping hand to both working class/employees as well as the employers.

As per the latest notification, statutory contributions both on part of the employee and the employer (12+12=24%) of eligible establishments shall be borne by the Central Government under PMGKY ensuring increase in take home salary to the employees and liquidity in the hands of the employers. This Scheme has been announced to be extended up to wage month August 2020.

The Government has also reduced the statutory contribution rate from 12% to 10% for the wage months May, June and July, 2020 for all class of establishments except Central/State PSEs.  A member opting to contribute higher than the statutory rate could continue however the employer can restrict his contributions at the statutory rate of 10%. 

The reduced rate won’t be applicable for the establishments enjoying the benefits under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) as both the two shares i.e. 12% Employers’ and 12% Employees’ are being borne by the Central Government under the Scheme. These provisions intend to increase the take home salary to the employees as well as reduce statutory burden on the employers.

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