From August 1, EPF will be back to 12% each for employee, employer

Name: From August 1, EPF will be back to 12% each for employee, employer
Uploaded: 2020-07-31T12:30:56+05:30
Description: The idea behind the move, according to the government, is to offer support to workers and businesses who continue to face financial hardships in light of the coronavirus pandemic and the lockdown that followed.

The idea behind the move, according to the government, is to offer support to workers and businesses who continue to face financial hardships in light of the coronavirus pandemic and the lockdown that followed.

August 01, 2020 / 04:04 IST

As part of the measures taken by the government due to the COVID-19 pandemic, Finance Minister Nirmala Sitharaman announced on May 8 that monthly the Employees' Provident Fund (EPF) contributions of both the employers and employees were to be reduced to 20 percent from 24 percent for the months of May, June and July 2020. It was under the Atma Nirbhar Bharat package.

The reduced EPF contribution amount was for three months. So starting from August 1 onwards the EPF contribution will get back to the earlier contribution of 24 percent which would be 12 percent each from the employee and the employer.

The idea behind the move, according to the government, is to offer support to workers and businesses who continue to face financial hardships in light of the coronavirus pandemic and the lockdown that followed.

During this time, the reduced contribution amount meant that the take home pays of employees would be increased while the employers could make some savings. The move was aimed to offer huge relief to around 3.67 lakh employers and 72.22 lakh employees. In the case of the Central public sector enterprises and the state PSUs will, however, continue to contribute 12 percent as employer's contribution towards EPF.

Attention for those employees who opted for Voluntary Provident Fund (VPF) to reduce the impact of the lower EPF contributions.

If you do not stop the VPF, the VPF deduction - as well as the restored EPF deduction - will be made from your salary from next month, as The Economic Times reported.

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Frequently Asked Questions

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A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

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There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

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From August 1, EPF will be back to 12% each for employee, employer

The idea behind the move, according to the government, is to offer support to workers and businesses who continue to face financial hardships in light of the coronavirus pandemic and the lockdown that followed.

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