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EPFO Alert! Mandatory Contribution Of Employees, Employers Likely To Increase | DETAILS
At present, the wage ceiling for the EPFO's Employees' Provident Fund (EPF) scheme is Rs 15,000 per month and the scheme is available to organisations having 20 plus employees
New Delhi: Soon both employers and employees may have to shell out more money from their kitty every month to contribute towards the retirement savings scheme. The union government is likely to revise the wage ceiling for the Employees’ Provident Fund Organisation’s (EPFO) flagship retirement scheme, said a report. The move will increase the mandatory contribution by both employees and employers, and in turn help, the employees save more for their retirement.
At present, the wage ceiling for the EPFO’s Employees’ Provident Fund (EPF) scheme is Rs 15,000 per month and the scheme is available to organisations having 20 plus employees. Shortly a committee will be set up to determine a higher wage ceiling which will be indexed to inflation and reviewed periodically for coverage under EPFO, an ET report said quoting sources.
WHAT IS LIKELY TO BE CHANGED
It is said that the EPFO wage ceiling could be aligned with the higher Rs 21,000 per month wage ceiling under the Employees’ State Insurance Corporation. The report says that this move will bring parity between the two social security schemes of the government run by the labour ministry and ease the compliance burden on establishments.
In the current scenario, organised sector employees earning less than Rs 15,000 per month have to mandatorily make EPF contributions at the rate of 12 per cent on the prescribed Rs 15,000 maximum wage. The EPFO currently manages social security deposits of 68 million workers. Once the wage ceiling is revised to Rs 21,000, it is estimated that 7.5 million more workers will come under the ambit of EPFO, according to the ET report.