EPFO penalty for late payment: What employers will now pay for delays

New Delhi: The Employees’ Provident Fund Organisation charges a penalty of employers defaulting on PF, pension and insurance deposits. The pension fund body has regularised the penalties on defaults across time frames. EPFO imposes a  1 per cent per month or 12 per cent per annum penalty on defaulting companies. These penalty rates will apply to all employers registered under:

Employees’ Pension Scheme
Employees’ Provident Fund (EPF) Scheme
Employees’ Deposit Linked Insurance Scheme (EDLI)

EPF vs SIP

EPFO regularises penalty on defaulting employers

The EPFO has halved the penalty on defaulting employers to 12 per cent per annum from 25 per cent per annum, earlier, effective immediately, according to an official notification. To be sure, penalties were staggered based on the duration of default earlier:

5 per cent per annum for less than 2 months
10 per cent per annum for 2 months or more but less than 4 months
15 per cent per annum for defaults of 4 months and above but less than six months
25 per cent for defaults of 6 months and above

EPF and PPF

How does EPFO work

The employer contributes 12 per cent of the employee’s salary to EPFO while the employee also pays a similar proportion of their salary to PF. Of the 12 per cent employer contribution, 8.33 per cent is allocated to EPS, 3.67 per cent to the EPF, and 0.5 per cent to EDLI. The entire 12 per cent of the employee’s contribution in to the provident fund account. These adjustments are intended to streamline compliance and ensure timely deposit of employee contributions to safeguard their retirement benefits.

 EPFO Penalty for late payment: The EPFO has laid down certain penalties for defaulting employers who fail to pay their employee’s PF on time.  Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today