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Your Take Home Salary to Go up as Centre Reduces EPF Contribution to 10% for the Next 3 Months

The move to temporarily reduce EPF contribution will help increase the take-home pay of private sector employees.

The move to temporarily reduce EPF contribution will help increase the take-home pay of private sector employees.

The government says that this move will provide relief to 6.5 lakh establishments and will provide Rs 6,750 crore worth of liquidity over the next three months.

  • News18.com NEW DELHI
  • Last Updated: May 13, 2020, 6:24 PM IST
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In a bid to increase demand in the country which will help revive the economy, finance minister Nirmala Sitharaman on Wednesday decided that Employee Provident Fund (EPF) contribution for business entities and workers for the next three months will be reduced to 10 per cent from the current 12 per cent.


This move will help increase the take-home pay of employees. However, this will not be applicable for state-run public sector enterprises.


“It will also reduce the cost to the employers, especially for international workers where the company picks up the cost, " said Saraswathi Kasturirangan, Partner, Deloitte India.

The government says that this move will provide relief to 6.5 lakh establishments and will provide Rs 6,750 crore worth of liquidity over the next three months.

This scheme is applicable for workers who are not eligible for 24 percent EPF support under PM Garib Kalyan package and its extension.


On March 26, the Finance Minister had said that the Centre will pay the EPF contribution both of the employer and of the employee (12 per cent each) for the next three months. However, this is only for those establishments that have up to 100 employees and 90 percent of whom earn under Rs 15,000 per month.


This provision was further extended by another three months on Wednesday. The FM had also said that the provident scheme regulations will be amended to allow the non-refundable advance of 75 percent or three months’ wages, whichever is lower. This will benefit 4.8 crore workers who are registered with the EPF.


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