PF Admin charges – explanation with contribution rates
Understanding PF Admin Charges with Contribution Rates
In this post, we will discuss the detailed explanation on PF admin charges. Here, we will cover the meaning, calculation and the revised administrative charges.
What are PF admin charges?
PF admin charges are the contribution from the employer’s end. It is calculated on the basis of your Basic+DA from your salary. The breakup of EPF contribution is different for the employee and the employer. In addition to 12% of employer PF/PS contribution, the employer also has to pay other charges. The full break-up of the percentage of contribution is as seen below:
- Employee – 12% of Employee Provident Fund (EPF).
- Employer –
- 3.67% into EPF
- 8.33% into EPS
- 0.5% into EDLI
- 0.50% into PF admin charges from June 2018
Note: Minimum contribution Rs. 500 or Rs. 75 for non-contribution of PF admin charges.
Calculation of PF admin charges
In this example, we have considered one PF contributing employee whose Basic+DA = 15,000.
| Accounts of pf challan | Employer Contribution | Calculation |
|---|---|---|
| A/C no 1: PF contribution account | 3.67% | 15000*0.0367=550.5 |
| A/C no 2: PF admin account | 0.5% | 15000*0.005=75 |
| A/C no 10: EPS account | 8.33% | 15000*8.33%=1249.5 |
| A/C no 21: EDLI account | 0.5% | 15000*0.005=75 |
| Total | 1950 |
10% Rate of contribution will be applicable for -
- Any establishment in which less than 20 employees are employed.
- Any following industries:
- Beedi
- Jute
- Brick
- Cior and
- Guar gum factories
- Sick industrial companies which have been declared as such by the Board for Industrial and Financial Reconstruction (BIFR).
- And Any establishment which has at the end of any financial year, Accumulated Losses equal to or exceeding its entire Net Worth.
| Particulars | Employer contribution | Employee contribution |
EPF Admin charges EPF Contribution EPS Contribution EDILS | 0.50% 1.67% 8.33% 0.50% | 10% |
Note:
- The employee contribution towards EPS, EPF, EDIL and Admin charges should be rounded up to the next value.
- Minimum administration charges have to be paid 75 for Non – Functioning organisation and employer contribution 500 per month towards EPF Admin charges.
Calculation of EPS, EPF, EDIL and Administration charges -
There are the following examples that will show you the contributions towards funds of employer and employee with the under or over the prescribed limits.
Calculation of employee contribution, when salary is less than 15,000
If an employee is paid 15,000 per month and his Basic Salary is 10000, DA 3,000, and HRA 2,000.
I,e. the calculation of contribution is –
Basic + DA = PF Gross Pay
>10,000 + 3,000 = 13,000
| Contributions | Employer | Employee |
| EPF | 13,000*3.67% = 477.1 Rounded up 477 | 13,000*12% = 1560 |
| EPS | 13,000* 8.33% = 1,082.9 Rounded up 1,083 | |
| Admin | 13,000*0.50% = 65 | |
| EDIL | 13,000*0.50% = 65 |
The contribution of EPS, EPF, EDIL and Admin will be rounded up individually
Calculation of employee contribution, when salary is more than 15,000
According to law, there is no restriction on contributors to deposit into the fund where the salary is above 15000.
If an employee is paid Rs. 18,000 per month. And his Basic 9,000, DA 7,000, HRA 2,000
Conveyance Allowance 1000
Total = 19,000
Basic + DA = EPF Gross
9,000 + 7,000 = 16000
Now, we can calculate the EPF contribution in the following ways.
Example-1
Calculation on Contribution of Total basic –
| Contributions | Employer | Employee |
| EPF | 16,000*12% =1920 (1920-1250 EPS) = 670 | 16000*12%=1920 |
| EPS | 15,000*8.33% = 1250 | |
| Admin | 16,000*0.50% = 80 | |
| EDIL | 15,000*0.50% = 75 |
Note – EPS and EDIL amounts will not be calculated on exceeding amounts.
Example-2
In this case, an employer contributes on ceiling limits, but the employee is contributing on Net Pay.
| Contributions | Employer | Employee |
| EPF | 15,000*3.67% = 550.5 | 16000*12%=1920 |
| EPS | 15,000*8.33% = 1250 | |
| Admin | 15,000*0.50% = 75 | |
| EDIL | 15,000*0.50% = 75 |
Example-3
In this case equivalent to the limit of 15,000 –
| Contributions | Employer | Employee |
| EPF | 15,000*3.67% = 550.5 Rounded up – 551 | 15,000*12% = 1,800 |
| EPS | 15,000*8.33% = 1250 | |
| Admin | 15,000*0.50% = 75 | |
| EDIL | 15,000*0.50% = 75 |
This completes our blog of PF/EPF admin charges. If you have any questions, drop them in the comment section below.
