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Hi everyone,

I’m a salaried employee and my employer deducts Rs. 780 every month towards EPF. I had a few queries regarding this:

1. Does my employer give an equal contribution of Rs. 780 each month into my EPF account, or is the 780 split in half, 360 as my contribution and 360 as my employer’s? I ask this question because I dont see any additional deduction towards EPF in my gross salary amount.

2. Can i put in more than just Rs. 780 every month? And If I do so, are my employer’s bound to put an equal matching contribution? Will it not be a loss for them to simply put in more money out of their pockets, effectively I can increase my salary is it not? :)

3. How do I maximize my savings out of an EPF account. I mean to ask, what amount should I invest each month so as to draw an equal matching amount from my employer?

4. Is EPF better than PPF? I dont mind locking in a certain amount of money for 15 years. If I put 70k each year in PPF, would that be better than increasing my monthly EPF contribution?



4 Answers

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1 Sunnydoc April 24, 2011 at 11:59 pm

One more thing, my gross salary is 37940 per month, with the basic salary as 12000. I somehow feel that the 780 per month less. Can anyone shed light on how this is calculated?


2 amol82 April 26, 2011 at 10:18 pm

As I know, EPF contribution is 12% of your basic salary. employers also have to add 12% of your basic salary from his side.


3 Jagadees April 27, 2011 at 9:26 am

@sunny doc
12% of your basic salary will be contributed to ur EPF fund and similarly ur employer will contribute 12% of your basic salary for the fund. You have the option to increase your contribution to 100% of the basic salary, however ur employer is not mandated to increase beyond 12%. Historically the interest rate of EPF will be atleast 0.5% greater than PPF i.e. 8.5% for the EPF. But the current year the govt declared to give 9.5% due to the availability of excess unclaimed fund with EPFO (though it may not continue from next fiscal year)…..



4 Sunnydoc April 28, 2011 at 2:42 am

Hi thanks for the replies.. So if the deduction should be 12% of my basic salary then i think 780 is a less amount as 12% translates to Rs. 1440. Can anybody please explain any possible reasons for this and what I must do to rectify it?


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