Employee and Employer Contribution explained: this guide covers what it 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.
Provident Fund (PF) is funded by equal contributions from the employee and employer. Here is how the contribution is split and calculated.
Contribution rates
- Employee: 12% of basic + DA
- Employer: 12%, split as 8.33% to the pension scheme (EPS, capped) and 3.67% to PF
- Plus small EDLI and admin charges by the employer
Wage ceiling
PF is mandatory on basic wages up to ₹15,000/month; contributions above this are voluntary.
Example
On a basic of ₹15,000, the employee contributes ₹1,800 and the employer ₹1,800 (with ₹1,250 going to EPS).
Frequently Asked Questions
What is the PF contribution rate?
12% from the employee and 12% from the employer of basic + DA.
How is the employer PF split?
8.33% to the pension scheme (EPS) and 3.67% to PF.
What is the PF wage ceiling?
₹15,000/month for mandatory contribution.
Is PF contribution above ₹15,000 allowed?
Yes — voluntarily, as VPF.
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