EPF Salary Cap Update: Employees’ wage limits may be raised. In fact, a high-level group has advocated raising the pay cap under the Employees’ Provident Fund Organization (EPFO). And if this raise occurs, 7.5 more employees will benefit. Please provide us with specifics.
Latest EPS News: There is some positive news for employees. A high-level committee has proposed raising the wage cap for the Employees’ Provident Fund Organization. According to the committee, the wage gap should be raised from Rs 15,000 to Rs 21,000 per month. According to the committee, the government is contemplating it, and it can be imposed retroactively.
Who will benefit?
If this idea is enacted, around 7.5 lakh new workers will benefit from the scheme, which will also compensate for salary increases since the last amendment in 2014. According to the Economic Times, a senior government source stated, “If this idea is accepted by the Central Board of Trustees of the EPFO, it will give relief to employers who are willing to instantly face any additional financial burden.” are hesitant to do so.
Government exchequer relief
Actually, the employers had requested this hike, citing a deteriorating budget as a result of the Corona epidemic. If the idea is approved, the exchequer will benefit as well, as the central government now pays approximately Rs 6,750 crore per year for the EPFO Employees’ Pension Scheme. Let us remind you that the government contributes 1.16 percent of EPFO subscribers’ total basic salary to this scheme.
EPFO Central Board of Trustees member KE Raghunathan stated that there is a general understanding within the EPFO that the same criteria should be followed for delivering social security under both EPFO and ESIC. The disparity in standards between the two programs should not deprive workers of their social security benefits.
Read More: EPFO: Announced, interest money will come in the account of PF employees on this day, check soon.
What are the current EPS rules?
When we start working and become members of EPF, we also become members of EPS. The person contributes 12% of his salary to EPF; his firm contributes the same amount, but a portion of it (8.33%) goes to EPS. As previously stated, the maximum pensionable wage is currently just 15 thousand rupees, which means that the monthly pension share is only Rs 1250 (8.33 percent of 15,000).
Even after the person retires, the maximum wage for calculating the pension is Rs 15 thousand; thus, the maximum pension an employee can receive under EPS is Rs 7,500.
This is how pensions are calculated
One thing to keep in mind is that if you started contributing to EPS before September 1, 2014, your maximum monthly wage for pension contribution will be Rs.6500. If you joined EPS after September 1, 2014, your maximum compensation will be 15,000 per year. Now consider how pensions are computed.
