Good News for Salaried! Govt Continues to Pay 24% EPF Contribution till Aug 2020

Good News for Salaried! Govt Continues to Pay 24% EPF Contribution till Aug 2020

Amid financial disruptions induced by COVID 19 pandemic and subsequent lockdowns, the government of India has decided to continue paying Employees Provident Fund (EPF) for both employers and employees till August 2020 under PMGKY/ Aatmanirbhar Bharat. The decision was announced after the Cabinet meeting that was held today.

The government will continue to serve for 24% EPF contribution (12% each for employees and employers) for another three months, i.e. from June 2020 to August 2020. As per the official statement the estimated expenditure of Rs.4,860 crore will benefit over 72 lakh employees.

The decision aims to provide relief to small businesses facing unprecedented cash crunch due to ongoing pandemic & lockdown situation.

The payment of employer and employee contribution was first announced in March this year. It has been serving organisations up to 100 employees and up to 90 per cent of low income employees drawing wage up to Rs 15,000 per month. As per rules, an employee drawing salary up to Rs 15,000 should mandatorily join EPF scheme. Herein, employee is entitled to make a contribution of 12 % of his basic salary plus dearness allowance (if any) to the EPF account. The same amount is contributed by the employer. Out of the total 24% contribution, employee’s share plus 3.67% of 12% employer’s share of goes to the EPF account and the rest of 8.33% goes to the Employees Pension Scheme (EPS).

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