EPF contributions to revert to old levels from August

As part of relief measures of the Government of India for both employers and employees during the COVID 19 pandemic, Employees’ Provident Fund (EPF) contribution was slashed by 4% for the months of May, June and July but from August onwards, the deduction will be as the old rates.


In May 2020, the Finance Minister Nirmala Sitharaman had announced a reduction in the EPF contribution by 4% for three months so that the employees could get the liquidity support of Rs 2250 Crores every month, amid the pandemic situation. It was cut by 2% from the employer and the same amount from the employee.

EPF Scheme

According to the rules of the Employees’ Provident Fund Scheme, the employees and the employers deposit a total of 24% i.e. 12% each by the employer and the employee, towards the EPF deductions every month for the retirement savings maintained by the Employees’ Provident Fund Organization.

Impact of the Decision

Due to the decision taken by the government, the in-hand salaries of the employees were increased by a sum equivalent to 4% of the basic and DA. For the employees of the Central Public Sector Enterprises and state PSUs, 12% of the employers’ share was paid whereas the employees paid 10% of their basic and DA for these three months.


Leave a Reply