Employees Provident Fund is a saving scheme for companies in India. With the help of Employees Provident Fund, method employees can save a portion of their salary in their bank account which they can get after their retirement or after leaving the company. EPF is a really good scheme if you are seeking for savings for your future or for your children or if you want to invest some money in real estate or somewhere ese.
Steps to calculate Employees Provident Fund
It is simple to calculate Employees Provident Fund but firstly we have to know the contribution made by employer and employee. Basically the contribution made by employee is 10-12 percent of the salary along with the dearness allowance(DA).
- Get to know the contribution of your employer and employee.
- Basically employee contribute 10-12 percent of their salary which comprise Employees’ Deposit Linked Insurance(EDLI) scheme and Employee Pension Scheme(EPS).
- As we know the rate is 10-12% for EPF but at present the rate is 8.65% due to some circumstances and effective changes.
- Break-up of employer’s PF contribution also depend for the calculation of EPF.
Contribution To EPF By Women Employees
As we know that the basic rate of EPF is 10-12% but due to less employment of women in formal sector it is decreased to 8% to increase the employment rate of women in formal sector and to motivate them to work with formal sector. But this scheme is applied for initial 3 years of the work and the the contribution of employers will be continued at 10-12%.
Scheme For New Employees
The new employees who are starting there work with formal sector do not have to make any contribution as Government will make EPF contribution for 3 years on the behalf of new employees which will be 10-12%.