The government last increased the wage ceiling limit in 2014. Then it was increased from Rs 65000 to Rs 15,000. If the government increases the wage ceiling limit, then the contribution of the employee and employer in retirement and pension savings will increase.

Contribution to EPS will increase every month

Experts say that increasing the wage ceiling limit will increase the contribution to EPS . This will increase the pension received by the employee after retirement. Every month, the employee and the employer have to contribute equal amount in EPF. 12% of the employee’s basic salary is deposited in EPF. The employer also contributes 12% of the basic salary. Out of this 12%, 8.33% is deposited in the EPS account. The rest is deposited in the EPF account.

Calculation based on wage ceiling limit of Rs 15,000

Currently, 8.33 percent of Rs 15,000 is deposited in the employee’s pension account (EPS) every month. When the wage ceiling limit increases to Rs 21,000, 8.33 percent of this amount will be deposited in his EPS account. This means that Rs 1,749 will be deposited in the employee’s EPS account every month. Currently, 8.33 percent of Rs 15,000, i.e. Rs 1,250 is deposited in the employee’s EPS account every month.

Out of the employer’s 12% contribution, 8.33% goes to EPS

Experts say that if the government increases the wage ceiling limit, then the pension amount of the employee will increase. The reason for this is that after retirement, the employee gets the entire amount deposited in EPF in lump sum. But, he gets pension every month on the money deposited in EPS. By increasing the wage ceiling limit, more money will be deposited in his EPS account every month.

Change in wage ceiling limit 10 years ago

This will result in a good amount of money being deposited in his EPS account till retirement. This will also increase his pension every month. Experts say that the government had revised the wage ceiling limit 10 years ago. Meanwhile, inflation and income have increased. Therefore, the government should make changes in it.

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The post PF contribution: Govt can increase the contribution limit of EPF, EPS to Rs 21000, Details Here first appeared on Rightsofemployees.com.

The government had last increased the wage ceiling from Rs 6,500 to Rs 15,000 in September 2014. The increase in the salary ceiling will affect the contribution made by employees to EPF and Employee Pension Scheme (EPS). This will bring more employees under the EPS pension scheme. Here we are going to tell you how the increase in EPF salary limit will affect you.

According to the Provident Fund Act, if an employee’s basic salary is more than Rs 15,000 per month, he cannot join EPS, even if he is a part of the EPF scheme. Now, if the salary limit is increased to Rs 21,000, employees joining the EPF scheme with a basic salary of more than Rs 15,000 will also be eligible to join EPS. Once the proposal is approved, individuals with a basic monthly salary of Rs 21,000 will be able to enrol in the EPS scheme. This change will also pave the way for these employees to become eligible for pension on retirement.

EPF is less, EPS is more

However, employees should note that if they become EPS members, the employer’s contribution to the EPF account will reduce. This is because currently both employee and employer contributions are credited into the EPF account. This makes the EPF corpus larger. Once these employees join the EPS scheme, 8.33% of the employer’s 12% contribution will go into the EPS account.

The increase in EPF wage ceiling will also increase the EPS contribution. Currently, a contribution of Rs 1,250 is deposited in the employee’s EPS account every month. The current EPS law allows a person to deposit a maximum of Rs 1,250 in an EPS account. EPS contribution is calculated on the employer’s contribution over the wage ceiling limit. That is, it is 8.33% of Rs 15,000. The balance of the employer’s contribution is deposited in the employee’s EPF account along with his own contribution.

What will be the effect

Now if the salary limit is increased to Rs 21,000 per month, Rs 1,749 will be deposited in the EPS account per month. Due to the increase in EPS pension contribution, less balance will be deposited in the employee’s EPF account. This can be understood with an example. Suppose the basic salary of an employee is Rs 25,000 per month. His employer contributes 12% of Rs 25,000 to the EPF account which comes to Rs 3,000.

Out of this 12%, 8.33% goes to the EPS account. The salary limit for EPS contribution is Rs 15,000. Hence the EPS pension contribution is limited to Rs 1,250. The balance of Rs 1,750 (Rs 3,000 minus Rs 1,250) goes to the EPF account. If the salary limit is increased to Rs 21,000 per month, the EPS pension contribution becomes Rs 1,749 per month. The remaining Rs 1,251 (Rs 3,000 minus Rs 1,749) will be deposited in the EPF account.

How much will be the benefit

The increase in EPF salary ceiling will also result in higher pension amount on retirement. The formula to calculate EPS pension on retirement uses salary ceiling as the maximum average monthly salary. If the salary ceiling limit is increased to Rs 21,000, the pension amount received will also increase. The formula to calculate EPS pension is as follows: Number of years of pensionable service x Average monthly salary for 60 months)/70.

Let us understand this with an example. Suppose the pensionable service period of an employee is 30 years. The monthly salary will be calculated by taking the average salary of 60 months before retirement. However, if the basic salary of the employee during the 60 months is more than the current salary limit of Rs 15,000 per month, then Rs 15,000 will be considered as one month’s salary to calculate the pension. Apart from this, if an employee has worked for more than 20 years, then 2 years are added to the service period as a bonus. In this way, the monthly pension received by the EPS member will be Rs 6,857, i.e. (32×15,000)/70.

How much will the pension increase

However, if the salary limit is increased, the average monthly salary for calculation purposes will become Rs 21,000. In such a case, the monthly pension received by the employee will be Rs 9,600. The calculation for this will be based on (32×21,000)/70. Thus, an increase of Rs 6,000 in the salary limit will increase the monthly pension by Rs 2,743. Both the employee and the employer contribute 12% of the basic salary to the EPF account. The entire share of the employee goes to the EPF account. Out of the employer’s 12% contribution, 8.33% is deposited in the EPS account and the remaining 3.67% in the EPF account.

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The post Wage ceiling limit: Will you benefit or lose by increasing the wage ceiling limit in PF? Know the complete calculation first appeared on Rightsofemployees.com.

Employees’ Provident Fund Organization (EPFO) has released an Excel utility-based calculator to estimate the dues. Which one has to pay from the remaining amount of his EPF or from his savings, if necessary. Employees can now determine how much contribution they will have to make to get higher pension from the Employees’ Pension Scheme (EPS). 

This is a special facility for the employees from the Employees’ Provident Fund Organization. Which can be used by the employees to know their contribution. EPFO has extended the application deadline for higher pension by 15 days to July 11, 2023.

Know how to download EPFO’s excel calculator for more pension –

• To use this calculator, the employees should know the date of registration of their EPF scheme. On joining the EPF system after November 1995, the employee has to enter the salary amount starting from that date.
• Click on “Pension on higher pay: exercise of combined option under para 11(3) and para 11(4) of the EPS 1995” on or before 11th July, 2023.
• Click on the calculator to estimate arrears of pension on higher pay.
• Read the disclaimer and click ‘Download Calculator’

It has 5 sections which include Salary Entry, Calculation Sheet (Payment to be made by the member), Summary details under various sheets. The actual outstanding amount will be calculated on the basis of records by the concerned Regional Office of EPFO.

How to use EPFO’s Excel calculator?

Before using this calculator, the employees should have access to all their pay checks from the day they joined the EPS scheme. This is so that the employee can enter his monthly salary information manually in the calculator. Do note that as per the EPF laws, basic salary plus any dearness allowance is considered as “Salary” for the purpose of computing monthly contribution to EPS and EPF accounts.

An employee has to manually enter the basic salary data into an Excel calculator using the information from the pay slip. After entering the information, further calculations will be done by the calculator. Along with this, interest will also be calculated through the calculator. 

If there is sufficient balance in the employee’s EPF account, both these amounts will be clubbed and paid into the EPS account. Note that the amount deposited in the EPF account till March 31, 2023 will be calculated by the Excel calculator till the financial year 2022-2023 only. Based on the date of payment, it shows the total amount to be paid till FY 2022-23 as well as the additional amount to be paid for the current financial year (2023-24).

The post Higher EPS Pension: How to Download EPFO’s Excel Calculator for Higher EPS Pension? first appeared on Rightsofemployees.com.

Which means, the employees whose salary is less than 15 thousand or 15 thousand rupees, then their salary limit will now be 21 thousand rupees. For example, if the salary of an EPF employee is 15 thousand rupees, then his salary will be 21 thousand rupees per month.

The proposed increase of the salary limit to Rs 21,000 per month has been endorsed by a committee, the report said. The committee has said that the government may implement the increase from a later date after deliberation. In such a situation, if the increase is accepted by the Central Board of Trustees of EPFO, then lakhs of employees will get a big relief.

According to media report, once the proposal is implemented, an estimated 7.5 million additional workers will benefit from the scheme. At present, the central government pays about Rs 6,750 crore annually under the Employees’ Pension Scheme.

The report also said that any company with more than 20 employees must be registered with the EPFO ​​and the EPF scheme has been made mandatory for all employees earning less than Rs 15,000. Along with this, it has also been told that workers more than the limit of Rs 21,000 will be brought under the purview of retirement scheme and the benefit of other social security scheme will also be given.

Explain that under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, EPFO ​​provides social security benefits to the employees in the form of pension and insurance funds. As per the data, in January 2022, EPFO ​​added 1.52 million employees on a net basis, which is an increase of over 21 per cent as compared to 1.26 million in December 2021.

The post EPFO Salary limit Increased Today! Big News: Salary limit of employees will be increased from Rs 15000 to 21000, claimed in the report first appeared on Rightsofemployees.com.

At present, the Employees’ Provident Fund Fund (EPFO) allows subscribers to withdraw deposits from the Employees’ Provident Fund account only if there is less than six months of service left.

In the 232nd meeting of the Central Board of Trustees (CBT), the apex body of EPFO, on Monday, it was recommended to the government that by making some amendments in the EPS-95 scheme, the subscribers who are nearing retirement should be allowed to withdraw the amount deposited in the pension fund.

What happened –

According to the statement of the Ministry of Labor, the CBT has recommended to the government that members with less than six months of service should be given the facility of withdrawal from their EPS account. Apart from this, the Board of Trustees has also recommended proportionate pension benefits to the members who have been part of the scheme for more than 34 years.

This facility will help the pensioners to get more pension at the time of determination of retirement benefits. Apart from this, the 69th Annual Report on the functioning of the EPFO ​​for the financial year 2021-22 was also approved, which will be presented in the Parliament.

Relief to EPFO ​​subscribers-

In order to provide relief to the working people, the Employees’ Provident Fund Organization (EPFO) on October 31 decided to allow withdrawal of deposits in the Employees’ Pension Scheme 1995 (EPS-95) for those customers who have only less than six months. remaining service.

The Central Board of Trustees (CBT) of the retirement fund body, chaired by Union Labor Minister Bhupendra Yadav, in its 232nd meeting, recommended certain amendments in the EPS-95 scheme to the government, a Labor Ministry statement said. This will help the pensioners to get a good amount as pension at the time of determination of retirement benefits.

Investing in Exchange Traded Fund-

The board has also recommended Equitable Value Transfer calculation in cases of exemption or cancellation of exemption from EPS-95. Apart from this, the policy has also been approved for its investment in Exchange Traded Fund (ETF) units.

The Board also approved the inclusion of ETF units purchased during the calendar year 2018 period for capital gains to be included in income for computing the interest rate for 2022-23.

The post EPFO: Big news for PF account holders, EPFO changes made in EPF scheme, see here details first appeared on Rightsofemployees.com.

Which means, the employees whose salary is less than 15 thousand or 15 thousand rupees, then their salary limit will now be 21 thousand rupees. For example, if the salary of an EPF employee is 15 thousand rupees, then his salary will be 21 thousand rupees per month.

The proposed increase of the salary limit to Rs 21,000 per month has been endorsed by a committee, the report said. The committee has said that the government may implement the increase from a later date after deliberation. In such a situation, if the increase is accepted by the Central Board of Trustees of EPFO, then lakhs of employees will get a big relief.

According to media report Times, once the proposal is implemented, an estimated 7.5 million additional workers will benefit from the scheme. At present, the central government pays about Rs 6,750 crore annually under the Employees’ Pension Scheme.

The report also said that any company with more than 20 employees must be registered with the EPFO ​​and the EPF scheme has been made mandatory for all employees earning less than Rs 15,000. Along with this, it has also been told that workers more than the limit of Rs 21,000 will be brought under the purview of retirement scheme and the benefit of other social security scheme will also be given.

Explain that under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, EPFO ​​provides social security benefits to the employees in the form of pension and insurance funds. As per the data, in January 2022, EPFO ​​added 1.52 million employees on a net basis, which is an increase of over 21 per cent as compared to 1.26 million in December 2021.

The post EPFO Salary limit Increased! Big News: Salary limit of employees will be increased from Rs 15000 to 21000, claimed in the report first appeared on Rightsofemployees.com.

This contribution is 12-12 per cent of the basic salary plus dearness allowance. The interest rates of EPF are fixed every year by the government. At present, 8.1 percent annual interest (FY23) is there. EPF is such an account, in which gradually large corpus is formed till retirement.

Retirement Fund at ₹15,000 Basic Salary

Let’s say your basic salary and dearness allowance together is Rs 15,000. If you are 21 years old, then you can have a retirement fund (EPF Corpus) of Rs 1.26 crore by the time you retire through EPF i.e. by the age of 58. In this, the condition will be that the interest on EPF remains 8.1 percent till retirement and annual salary growth of 5 percent remains. Changes in this may result in change in retirement corpus. The maximum contribution that can be made in the EPF scheme is up to 58 years.

Check EPF Calculation

Basic Salary+DA= ₹15,000
Current Age= 21 Years
Retirement Age= 58 Years
Employee Monthly Contribution= 12%
Employer Monthly Contribution= 3.67 percent
Interest Rate on EPF= 8.10%
Annual Salary Growth= 5%
Maturity Fund at 58 Years = 1.26 crore (Employee contribution is Rs 23.26 lakh and Employer contribution is Rs 7.11 lakh. That is, some contribution is Rs 30.38 lakh.)

(Note: Annual interest rate is 8.1 per cent and salary growth is 5 per cent for the whole year of contribution.)

Employer’s entire 12% does not go towards EPF

12% of the basic salary and Dearness Allowance (Dearness Allowance) of the employee is deposited in the EPF account. But, the employer’s 12 percent amount is deposited in two parts. Out of 12 per cent contribution of the employer, 8.33 per cent is deposited in the Employee Pension Account and the remaining 3.67 per cent goes into the EPF account.

Understand contribution from ₹15,000 salary

Employee Basic Salary + Dearness Allowance = Employee Contribution in ₹15,000
EPF = 12% of ₹15,000 = Employer Contribution in ₹1800
EPF = 3.67% of ₹15,000 = ₹550.5
Employer’s Contribution to Pension Fund (EPS) 8. 33 ₹ 15,000 Contribution %= ₹1249.5

In this way, the total monthly contribution in the EPF account of an employee with a basic salary of Rs 15,000 in the first year will be Rs 2350 (Rs 1800 + 550). After this, the basic and dearness allowance will increase in the same proportion with a 5% increase in the salary on an annual basis. With which the EPF contribution will increase. It is mandatory for the employees whose basic salary is less than Rs 15,000, it is mandatory to join this scheme.

(Note: This figure for Retirement Fund through EPF Contribution has been taken on fixed interest rate, salary growth and employee and company contribution. This is only an estimate. The corpus may vary due to change in figures.)

The post EPF: ₹15,000 basic salary and 21 years of age; How much fund will be available on retirement, see calculation first appeared on Rightsofemployees.com.