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EPFO notifies reduction in EPF subscription rate to 10%

10% EPFO low rate of EPFO notified with high liquidity in the hands of employees and employers during COVID-19 epidemic Members of the public sector, their public undertakings...

VS Vikas SharmaTax & Compliance Expert
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Corporate Laws
Published
May 20, 2020
Last updated
Oct 1, 2026
Reading time
4 min
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Last updated: October 2026Verified against: Government sources

EPFO notifies reduction in EPF explained: this guide covers what EPFO notifies reduction in EPF means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

10% EPFO low rate of EPFO notified with high liquidity in the hands of employees and employers during COVID-19 epidemic

Members of the public sector, their public undertakings, and establishments whose membership is being borne by the Central Government under PMGKY continue to have a membership at the old rates of 12%, with the lower rates applicable for the pay months of May, June and July 2020.

Various measures have been announced from time to time to provide relief to the employers and employees of the establishments covered under the EPF & MP Act, 1952 distressed by Lockdown to prevent the spread of COVID-19 and other disruptions due to Pandemic.

The reduction in statutory rate of contributions from 12% to 10% for wage months May 2020, June 2020 and July 2020 for all class of establishments covered under the EPF & MP Act, 1952 announced on 13.05.2020 by the Central Govt. as part of Atma-Nirbhar Bharat package has been notified vide SO 1513 (E) dated 18.05.2020 published in the Gazette of India. The notification is available under the TAB- COVID-19 on the home page of the EPFO website. https://www.epfindia.gov.in/site_en/index.php

The above reduction of the rate of contribution is not applicable to establishments like Central and State Public Sector enterprises or any other establishment owned or controlled by or under control of the Central Govt. or State Govt. These establishments shall continue to contribute  12% of basic wages and dearness allowances.

The reduced rate is also not applicable for PMGKY beneficiaries, since the entire employees EPF contributions (12% of wages) and employers’ EPF & EPS contribution (12% of wages), totaling 24% of the monthly wages is being contributed by the Central Govt.

Reduction in rate of EPF contributions from 12% to 10% of basic wages and Dearness allowances is intended to benefit both 4.3 Crore employees/members and employers of 6.5 lakhs establishments to tide over the immediate liquidity crisis to some extent.

As a result of a reduction in statutory rate of contributions from 12% to 10%, the employee shall have a higher take-home pay due to a reduction in a deduction from his pay on account of EPF contributions and employer shall also have his liability reduced by 2% of wages of his employees. If Rs.10000/- is monthly EPF wages, only Rs.1000/- instead of Rs.1200/- is deducted from employee’s wages and the employer pays Rs.1000/- instead of Rs.1200/- towards EPF contributions.

In Cost to Company (CTC) model, if Rs.10000/- is monthly EPF wages, in CTC Model the employee gets Rs.200/- more directly from the employer as employer’s EPF/EPS contribution is reduced and Rs.200/- less is deducted from his/her wages.

Under the EPF Scheme, 1952 any member has the option to contribute at a rate higher than the statutory rate (10%) and the employer can restrict his contributions 10% (statutory rate) in respect of such an employee.

Quick recapKey facts & short answers

Key Facts About EPFO notifies reduction in EPF

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes EPFO notifies reduction in EPF end to end for you.

What is EPFO notifies reduction in EPF?

EPFO notifies reduction in EPF is an important compliance and legal topic for businesses and individuals in India. This guide explains its meaning, applicability and key requirements in simple language so you can understand and stay fully compliant.

Who needs to know about EPFO notifies reduction in EPF?

Business owners, startups, professionals, and taxpayers dealing with EPFO notifies reduction in EPF should understand the applicable rules. Requirements can vary by turnover, entity type and activity, so it is best to confirm your specific case before proceeding.

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EPFO notifies reduction in EPF: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

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Questions, answered

Short, direct answers to the 7 questions readers ask most on this topic.

EPFO notifies reduction in EPF is an important compliance and legal topic for businesses and individuals in India. This guide explains its meaning, applicability and key requirements in simple language so you can understand and stay fully compliant.

Business owners, startups, professionals, and taxpayers dealing with EPFO notifies reduction in EPF should understand the applicable rules. Requirements can vary by turnover, entity type and activity, so it is best to confirm your specific case before proceeding.

Typical documents include PAN, identity and address proof, business registration proof, and any category-specific forms. The exact checklist depends on your situation — TaxClue experts can prepare the correct set for EPFO notifies reduction in EPF and help you avoid rejections.

The process generally involves preparing documents, filing the correct form on the relevant government portal, paying applicable fees, and tracking status until approval. Following the right sequence for EPFO notifies reduction in EPF helps avoid delays and penalties.

Yes. Late or non-compliance related to EPFO notifies reduction in EPF can attract penalties, interest or late fees, and some filings have strict due dates. Staying on schedule protects you from avoidable costs — TaxClue sends timely reminders.

In most cases yes, EPFO notifies reduction in EPF can be handled online through the official government portal. TaxClue can complete the end-to-end process for you digitally, so you don't have to visit any office.

TaxClue's CA, CS and legal experts handle EPFO notifies reduction in EPF end to end — eligibility check, documentation, filing, and follow-up. Refer to Income Tax Department for official rules, and contact TaxClue for hands-on, affordable assistance.

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