GOOD NEWS For Employees: EPF Salary Limit Increased

By IND Today News Desk Last updated Apr 12, 2024

GOOD NEWS For Employees: EPF Salary Limit Increased

Hyderabad, April 12 (Maxim News): The Center has given good news to the subscribers under the Employees Provident Fund Organization (EPFO). While the maximum wage limit of ESI was Rs. 15 thousand before 2016, the Central government increased it to Rs. 21 thousand. According to preliminary information, EpFO is to also increase the salary limit to Rs. 21 thousand.

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It seems that the Center is working to increase the maximum salary limit of employees to Rs. 21 thousand. The trade unions and affiliated organizations have been asking the Central government for this for some time now. In this order, it is reported that the Central Labour Department has started a preliminary exercise on the consequences of raising the wage limit.

At present the maximum salary limit of an EPF subscriber is Rs. 15 thousand. Before 2014 it was Rs. 6.500, the then government fixed this limit at Rs. 15 thousand. According to the EPFO formula, 12 percent is paid by the employer as a provident fund contribution to an employee, and another 12 percent is paid from the employee’s salary. This amount (excluding pension) is returned by EPFO along with interest at the time of the employee’s retirement.

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While the increase in the maximum salary limit of the subscriber will benefit the employee, the burden of higher payments will fall on the owners. According to the current formula, the maximum wage limit of an employee is Rs. 15 thousand, and 12 percent (Rs. 1800) of that is transferred by the employer to the employee’s EPFO account. Out of this, 8.33 percent (Rs. 1250) will be transferred to the pension account, while the remaining 3.67 percent Rs. 550) will be deposited in the provident fund account. Equal to this, 12 percent (Rs. 1800) of the employee’s salary is deposited in the provided fund account.

If the salary limit of the employee is increased to Rs. 21 thousand, the employer will have to pay 12 percent (Rs.2520) of this, in this calculation, Rs. 1790 will be deposited in the employee’s pension account and Rs. 730 in the provident fund account. Equal to this, Rs. 2520 will be deposited in the provident fund account from the employee’s salary. At present the maximum wage limit of a subscriber under the ESi Act is Rs. 21 thousand. those whose income exceeds Rs. 21 thousand will not come under ESI. (Maxim News)