Employer EPS Contribution Increased from Rs 541 to Rs 1250
In Aug 2014, EPFO decided to raise the wage ceiling for becoming a subscriber of EPFO to Rs 15,000 from Rs 6,500. The details can be found in my previous article. This decision took effect from September 1st, 2014 onwards.
One fallout of the decision is that the EPS share which my company was contributing every month got raised from Rs 541 to Rs 1250. This change is reflected in my EPF passbook for the October entry (i.e. September contributions). However please note that the increase in EPS share does not mean that your employer is shelling out more for you. This increase is accompanied by a corresponding decrease in employer's EPF share. The total employer contribution (EPF+EPS) is not changed. It remains fixed at 12% of the basic salary or 12% of the PF wage ceiling.
Calculations behind the increase -
The employer contribution towards EPS is capped at 8.33% of PF wage ceiling (if the basic salary of employee exceeds the wage ceiling) . Previously it was 8.33% of 6500 = 541 and now it has become 8.33% of 15000 = 1250