With years of work in an organization, you are subjected to higher payslip. Some employees might feel that they can , save more with the salary they are subjected to. The EPF contribution is 12 % of the basic pay of the employee. So, the question Is there any possibility for you to contribute more to your EPF account? So, in this article, we would like to throw some lights upon the query that Is it possible for an employee to contribute at a higher rate of interest than 12 %?
Higher PF Contributions:
The EPFO has designed the guidelines and norms related to the EPF. The EPF designed the EPF contributions to be 12 % of the basic pay of the employee. Moreover, your employer also contributes 12 % of your basic pay. And this is paid from the organization’s side to your account.
No employee can choose to contribute less than a 12% percentage into their EPF account. The EPFO has made it necessary for the employees to pay in EPF contributions if he/she is earning less than Rs. 15001. Provided the company satisfies the norm of having more than 20 employees working for the organization.
But when it comes to employees who find it manageable to contribute more to their EPF account. There is no restriction whatsoever onto the contribution that they want to make. This implies that you can contribute a percentage of more than 12% to your EPF account. Also, the employee contribution is subjected to no cap on their contributions.
This means that an employee can contribute about 100%of his/her (basic+ dearness allowance)pay to his/her EPF account. Thus 100% is the higher rate of interest employees can contribute if they have a salary hike. But it is important to note that the employer is not liable to match your contributions.
Your employee will continue to contribute 12% of your basic pay to your EPF account. But yes it has been prescribed that the employee and the employer need to contribute at least 12% of the employee’s basic pay. The additional contribution that you make into your EPF account is covered under the Provident fund norms. This is under the name of voluntary contributions. That is any contribution made by the employee over 12% of the basic pay is a voluntary contribution.
As soon as the conversation between the employee and the employer concludes, a Joint Declaration form has to be filled in by the employee and the employer. The form must state the name of voluntary contributions. Herein the terms and the percentage contributions to the EPF account has to be mentioned. This needs to be certified by the organization.
So, as soon as all the formalities related to the paperwork is done. The form has to be submitted by the employer of the company to the EPFO head office. And the employee can expect the change in the contribution, which would be in effect from the salary cycle.
EPF has been the torchbearer for the majority of the individuals in India. This is because India is a country that has the majority of the workforce working in the service sector. The benefits and flexibility that the EPF provides are unmatchable. Moreover, individuals who are earning a good amount of salary. Can take advantage of the norm mentioned above to further secure their futures. This would help an employee to be financially independent throughout his\her life.