EPF, EPS rules for people earning Rs 20,000 basic pay

The Employees Provident Fund (EPF) and Employees Pension Scheme (EPS) rules are changing for employees earning up to Rs 25,000 basic pay. Previously, employees contributing to EPF but not to EPS were not eligible to join EPS. However, with the wage ceiling raised to Rs 25,000, these employees will now have to join EPS.

For an employee with a basic salary of Rs 20,000, the monthly contribution will remain at 24% of their salary, amounting to Rs 4,800. Out of this, Rs 2,400 will go to their EPF contribution, and Rs 2,400 will be divided between EPF and EPS. The employer's contribution will also be split, with Rs 1,666 going to EPS and Rs 734 to EPF.

This change affects employees who earn more than Rs 15,000 but were not part of EPS earlier. Their employer's contribution, previously contributing entirely to EPF, will now be divided between both schemes. The EPS contribution will increase from 8.33% of Rs 15,000 to 8.33% of Rs 25,000, which is now Rs 2,083.