The present basic wage ceiling of INR 6,500 per month has been raised to INR 15,000 per month for the purpose of calculating contribution to the EPF. This implies that provident fund contribution is now mandatory for all employees whose monthly basic salary is lower than or equal to INR 15,000, compared to INR 6,500 previously.
Now, new entrants whose basic salary is more than INR 15,000 per month have the option to not opt for PF.
Changes to the provisions of the Employees’ Pension Scheme Contribution (EPS)
The present wage ceiling of INR 6,500 per month has been raised to INR 15,000 per month for the purpose of calculating contribution to the EPS. As a result, the maximum limit of contribution to EPS has been raised to INR 1,250 from INR 541.
New entrants to the PF scheme, joining on or after 1 September 2014 and whose basic salary is more than INR 15,000 per month, will not be able to join the EPS. EPS benefit continues to remain for the employees with a basic salary of up to INR 15,000.
For the purpose of calculating monthly pension, last 60 months’ average EPS wages are taken into consideration. Under the new scenario, the maximum EPS wages would be INR 6,500 per month up to 31 August 2014, and INR 15,000 per month from 1 September 2014.
Employees’ Deposit Linked Insurance (EDLI) contribution and EDLI administrative charges will also be revised accordingly.
Illustration for employees with basic salary of over INR 15,000