In a good news for organized sector employees as they may soon get an option of increasing their take-home salaries by reducing their monthly contribution to the employees’ provident fund (EPF).
According to Live Mint, if the government’s Social Security Code Bill, 2019, gets nod from the two House of Parliament, employees may soon have the option to reduce your provident fund (PF) contribution — currently at 12% of basic salary — and increase your take-home.
As present employees have to pay 12% of the basic monthly wages towards EPF. This will depend on the number of employees. Employers will have to pay 12% of basic, daily allowance and other allowances. For example, if the monthly basic salary is Rs 30,000, the employee contribution towards his or her EPF would be Rs 3,600 a month ( 12 percent of basic pay) while the equal amount is contributed by the employer each month.
According to Hindustan Times, the move basically aims to boost consumption in a slowing economy by putting more money in people’s hands. However, experts warn that such a provision should be used judiciously as it will directly hit the retirement corpus of an employee.
