Hello Members,
We are an organization with fewer than 10 employees since inception until now. We voluntarily opted for PF in 2016 and have been contributing 12% to PF since then.
According to the contribution rate specified on the EPFO website, a 10% contribution rate is applicable to organizations with fewer than 20 employees. We recently learned about this discrepancy and would like to inquire if we can henceforth contribute 10% instead of 12%.
Thank you.
From India, Mumbai
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We are an organization with fewer than 10 employees since inception until now. We voluntarily opted for PF in 2016 and have been contributing 12% to PF since then.
According to the contribution rate specified on the EPFO website, a 10% contribution rate is applicable to organizations with fewer than 20 employees. We recently learned about this discrepancy and would like to inquire if we can henceforth contribute 10% instead of 12%.
Thank you.
From India, Mumbai
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Once you have opted to contribute to the Fund at a higher rate (both employees and employer), you cannot reduce the contribution on your own.
In this connection, please also refer to Sec-12 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly.
From India, Aizawl
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699In this connection, please also refer to Sec-12 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme, reduce, whether directly or indirectly.
From India, Aizawl
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Dear Mr. Baburao,
Please verify the PF Code Number Allotment letter to determine the rate of EPF contribution based on the type of industry. Kindly confirm if your industry falls under the 10% EPF rate of contribution.
Thank you.
From India, New Delhi
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Please verify the PF Code Number Allotment letter to determine the rate of EPF contribution based on the type of industry. Kindly confirm if your industry falls under the 10% EPF rate of contribution.
Thank you.
From India, New Delhi
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(Fact Checked)-The EPFO rules mandate a 10% contribution rate for organizations with under 20 employees. Verify your industry's EPF rate accordingly. (1 Acknowledge point)
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Whether your Establishment falls under Schedule II which are permitted to Contribute @10% to EPF
From India, New Delhi
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From India, New Delhi
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(Fact Check Failed/Partial)-The user reply is partially correct. To contribute at a rate of 10% for organizations with less than 20 employees, the establishment must fall under Schedule I, not Schedule II. Kindly verify your establishment's schedule before amending contributions.
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Dear Friends,
I think our learned friend Nairji needs to reconsider his answer.
The statutory rate of PF is 12% from 22.09.1997 onwards.
The statutory rate of 10% is applicable to certain establishments only. I am not going into detail on that.
You cannot opt for a higher rate for both employees and employers as stated by Nairji.
Section 12 of the Act, which is on the employer not reducing wages, etc., has no relevance here.
What Baburaoji read on the EPFO website is not fully understood by him, in my opinion. Due to having less than 20 employees, he cannot have the statutory rate at 10%.
It is stated in the 1997 amendment enhancing the rate from 10% to 12% that this amendment is not applicable to covered establishments with fewer than 20 persons on the date of the notification, as far as I recollect now. I may be wrong in quoting this, but I am sure that you cannot have the statutory rate at 10% due to having fewer than 20 employees. When you apply under section 1(4), you get the code draft for 12% and not for 10%.
Due to my professional commitments, I am unable to spend as much time on this forum as I was until last week. Therefore, I am posting this very hurriedly.
From India, Mumbai
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I think our learned friend Nairji needs to reconsider his answer.
The statutory rate of PF is 12% from 22.09.1997 onwards.
The statutory rate of 10% is applicable to certain establishments only. I am not going into detail on that.
You cannot opt for a higher rate for both employees and employers as stated by Nairji.
Section 12 of the Act, which is on the employer not reducing wages, etc., has no relevance here.
What Baburaoji read on the EPFO website is not fully understood by him, in my opinion. Due to having less than 20 employees, he cannot have the statutory rate at 10%.
It is stated in the 1997 amendment enhancing the rate from 10% to 12% that this amendment is not applicable to covered establishments with fewer than 20 persons on the date of the notification, as far as I recollect now. I may be wrong in quoting this, but I am sure that you cannot have the statutory rate at 10% due to having fewer than 20 employees. When you apply under section 1(4), you get the code draft for 12% and not for 10%.
Due to my professional commitments, I am unable to spend as much time on this forum as I was until last week. Therefore, I am posting this very hurriedly.
From India, Mumbai
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(Fact Check Failed/Partial)-The user's reply contains inaccuracies. The statutory rate for PF contribution is indeed 12%. The provision regarding a 10% rate for establishments with fewer than 20 employees is not applicable. The user's interpretation of the law is incorrect.
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PF Notification for 10% Contribution Rate for 3 Months.pdf
CiteHR.AI
(Fact Check Failed/Partial)-The user's reply is incorrect. Employers can reduce PF contributions below the statutory rate as per EPF Act. Check Section 6 of the EPF Act for details.