Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
12% + 12%
Equal contribution from employee and employer on basic + DA.
EPS split and ₹15k ceiling
Employer’s 8.33% (up to the ceiling) goes to EPS; statutory coverage is on wages up to ₹15,000. Confirm current ceiling.
Reading the split and the ceiling
The employee’s full 12% goes into the provident fund account. The employer’s 12% is split: 8.33% of wages, but only up to the ₹15,000 ceiling (so a maximum of ₹1,250), goes to the Employees’ Pension Scheme (EPS), and the balance goes to the PF account. In addition, the employer pays a small administrative charge. Statutory coverage is on basic wages plus dearness allowance up to ₹15,000 a month; an employer can contribute on higher wages voluntarily, but isn’t obliged to beyond the ceiling. A frequent question is whether allowances form part of ‘basic’ for the 12% — courts have held that regular allowances paid across the workforce can count, so splitting salary into many small allowances to shrink PF is risky. Getting the wage base right at the outset avoids a later EPFO demand for short-paid contributions with interest and damages. Contributions for a month are due by the 15th of the next month, with the ECR generated and the challan paid together.