LKN
Unsplashed background img 1
EPFO Reduces The Contribution Rate To Ten Percent From Existing Rate Of Twelve Percent - The Employees Provident Funds and Miscellaneous Provisions Act, 1952

Notification dated 18 May 2020, issued by the Ministry of Labour and Employment, amending its earlier notification dated 9th April 1997, having No. S. O. 320 ( E ) with an intent to provide liquidity in the hands of employers and employees, in view of ongoing lockdown in the country. As per the notification dated 9th April 1997 ( copy enclosed) Govt. of India had increased the rate of PF Contribution from Eight and One-Third percent to Ten percent effective 1st May 1997 to all the establishments. However, this amendment was not applicable to the establishment/class of establishment as specified in ‘Schedule II’, so for these establishments the rate of contribution was Eight and One-Third percent.

 Subsequently, vide its Notification Ministry of Labour and Employment had increased the rate of PF contribution from Ten percent to Twelve percent, and the rate of PF contribution for the establishment/class of establishment as specified in ‘Schedule II’ has been increased from Eight and One-Third percent to Ten percent.  Therefore there are two rates of contribution now, Twelve percent for all the establishments except for the establishment/class of establishment as specified in ‘Schedule II’ for them it is Ten percent.

 Presently in ‘Schedule II’ there are four categories of establishments . for whom the rate of PF contribution is Ten percent. These establishments are as under:

 i)             Establishments engaging less than twenty persons

ii)            Any sick Industrial Company as defined under section 3 of the Sick Industrial Companies Act, 1985

iii)           Any establishment which has accumulated losses at the end of F.Y equal to or exceeding its entire net worth.

iv)           Any establishment in the (A) Jute Industry (2) Beedi Industry (3) Brick Industry  (D) Coir Industry other than spinning sector and ( E ) Gaur Gum Industry.

 Now by today's notification Govt. had amended the ‘Schedule II’ and added one more category V to it for whom the rate of PF Contribution both shares will be Ten percent

 “(v) Any establishment, other than Central Public Sector Enterprises and State Public Sector Enterprises and other establishments owned by, or under the control of the Central Government or the State Government, as the case may be, in respect of wages payable by it for the months of May, June and July, 2020”.   

 Therefore for all the establishments other than Central Public Sector Enterprises and State Public Sector Enterprises and other establishments owned by, or under the control of the Central Government or the State Government, the rate of PF contribution will be Ten percent for the month of May, June and July 2020.

 This benefit is not available to the establishments who are entitled to benefits under PM Garib Kalyan Yojna.


Send this government notification to

Did you find this content helpful?

Yes No

Call us on 09920-100-462 |Request a quotation

LK Nakashe Consultants Pvt. Ltd is India’s leading compliance & labour law consulting firm. Headquartered in Mumbai, we are ISO 9001 Certified & Crisil Certified, and we serve all 29 states and 7 union territories of India. Our service bouquet includes Registration & Renewal Services, End-to-End Monthly Compliance Services, Audit & Due Diligence Services, Advisory & Consulting Services, Payroll Management Services and Contract Staffing Services. Our client list of 750+ companies includes some of India’s biggest business conglomerates, MNCs, public listed companies & SMEs

First-of-its-kind app that UN-COMPLICATES compliance & labour laws. Download for free on iOS & Android Google play App store