EPF Contribution by Employer

As per Judgement of SUPREME COURT OF INDIA in SLP ( CIVIL) No. 8658-8659 OF 2019 in Employees Provident Fund & Miscellaneous Provision Act-1952.

The following clarification should get regarding 12 % Employer Contribution

(1)(1) Employee having UAN No (Already EPF member) :- Quit job and join new company with Salary/D.A. of Rs. 20000 pm in that case can The employer contribute 12% on 20000 actual salary (8.33% on 20000 in EPS & 3.67% on 20000 in EPF) ?

(2)(2) Employee having UAN No (Already EPF member):- Quit job and Join new company with

Salary/D.A. of Rs. 20000 pm in that case can The employer contribute 12% on 15000 Salary limit as per EPFO Notification (8.33% on 15000 salary limit in EPS & 3.67% on 15000 in EPF) ?

(3)(3) Employee having UAN No (Already EPF member):- Quit job and Join new company with

Salary/D.A. of Rs. 20000 pm in that case can The employer contribute 12% on 20000 actual Salary (8.33% on 15000 salary limit in EPS & Remaining Amount of rs 1150 in EPF (rs 2400(12% on 20000)-rs 1250 EPS(8.33% on rs.15000 limit)) ?

(a) Which one of above (1) to (3) is mandatory ?

(b) Which one or more discretionary/dependent on company’s policy ?

To address your questions regarding the 12% employer contribution for an employee with a UAN number, already an EPF member, who quits their job and joins a new company with a salary of ₹20,000 per month. Mandatory Contribution The mandatory contribution is as follows: - *Scenario 2*: The employer must contribute 12% on the ₹15,000 salary limit, as per the EPFO notification. This breaks down into 8.33% on the ₹15,000 salary limit in EPS and 3.67% on ₹15,000 in EPF.¹ Discretionary Contribution The discretionary contribution is: - *Scenario 1*: The employer may contribute 12% on the actual salary of ₹20,000 (8.33% on ₹20,000 in EPS and 3.67% on ₹20,000 in EPF). However, this is not mandatory. - *Scenario 3*: The employer may contribute 8.33% on the ₹15,000 salary limit in EPS and the remaining amount of ₹1,150 in EPF. Again, this is not mandatory. Other Considerations It's essential to note that: - Employees earning more than ₹15,000 per month can opt to contribute more than the mandatory 12%. - The employer's contribution is restricted to ₹15,000 per month for EPS. Please consult with a tax professional or chartered accountant to ensure compliance with the latest regulations and specific circumstances.