PF Admin charges – explanation with contribution rates
Understanding PF Admin Charges with Contribution Rates
In this post, we will discuss PF admin charges in detail, including what they are, how they are calculated, and the latest rules that employers should be aware of.
With the implementation of the Labour Codes, Provident Fund provisions are now covered under the Code on Social Security, 2020. The Code on Wages has also introduced a common definition of wages, under which Basic Pay and Dearness Allowance (DA) together must be at least 50% of an employee’s total CTC. As a result, employers who earlier kept the Basic Pay component low may see a higher wage amount considered for PF calculations.
Let’s look at the following sections:
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 (As per the new Wage Code, the Basic + DA must now be at least 50% of CTC)
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 |
Note:
The PF wage ceiling of Rs. 15,000 remains the same.
- The Labour Codes have changed how wages are defined for PF calculations, but the Rs. 15,000 ceiling has not changed.
- If an employer was earlier keeping the Basic Pay below the required level, the new 50% wage rule may increase the PF wage on which contributions are calculated.
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.
Impact of Labour Codes on PF Admin Charges
The Labour Codes have introduced a common definition of wages for all statutory contributions and benefits. Under the Code on Wages, Basic Pay and Dearness Allowance (DA) together must be at least 50% of an employee’s total CTC. If the allowance component is higher than the permitted limit, the excess amount will be added back while calculating statutory wages.
Since PF is calculated on statutory wages, employers should review their salary structure to ensure it complies with the new wage definition. Companies that earlier kept the basic pay component low may now have a higher PF contribution base.
It is also important to note that the PF wage ceiling of Rs. 15,000 has not changed. Employers should continue applying the existing ceiling while calculating PF contributions, even though the wage definition has been revised.
Additionally, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, has been subsumed into the Code on Social Security, 2020, which came into force on 21 November 2025. PF administration is now governed under the Code on Social Security, 2020.
Key takeaways on the impact due to introduction of New Labour Code:
- The PF wage ceiling of Rs. 15,000 continues to remain the same.
- The Labour Codes have changed the definition of wages used for statutory calculations, but they have not changed the PF wage ceiling.
- As a result, employers who earlier kept the Basic Pay component low may see a higher PF wage base because of the new 50% wage rule.
Conclusion
PF admin charges continue to be an important part of employer compliance. Even though the PF contribution rates and the Rs. 15,000 wage ceiling remain the same, employers should be aware of the changes introduced under the Labour Codes. As per the Code on Wages, Basic Pay and Dearness Allowance (DA) together must be at least 50% of an employee’s total CTC. This may increase the wage amount considered for PF calculations in some cases. It is therefore advisable for employers to review their salary structure and payroll process to make sure compliance with the latest rules.
This completes our post on PF admin charges. If you have any questions, feel free to leave them in the comments section below.
FAQs
1.Are PF admin charges paid by employees?
No. PF admin charges are paid only by the employer. They are separate from the employee’s PF contribution and are paid by the employer along with the other applicable PF payments.
2.Has the ₹15,000 ceiling changed?
No. The PF wage ceiling of Rs. 15,000 remains the same. The Labour Codes have changed the way wages are defined for statutory calculations, but they have not changed the existing PF wage ceiling.
3.How does the 50% wage rule affect PF?
Under the Code on Wages, Basic Pay and Dearness Allowance (DA) together must make up at least 50% of an employee’s total CTC. If an employee’s salary has a lower Basic Pay and higher allowances, the PF wage may increase after the salary structure is revised to meet this requirement. This may lead to higher PF contributions for both the employer and the employee, wherever applicable.
4.Do employers need to review their salary structure?
Yes. Employers should review their salary structure to make sure it complies with the standardised wage definition under the Labour Codes. If the basic pay is lower than the required level, the salary breakup may need to be revised. This can also affect PF calculations and the employer’s contribution.
