Use VPF and PPF to balance the reduction in EPF contribution
- Lower contribution for a three-month period may appear negligible. But the reduction in provident fund (PF) contribution can impact many other financial aspects.
- Employers give a small window for employees to opt for VPF. Typically, it is at the beginning of the financial year.
The government on 13 May reduced the employee’s and employer’s contribution to the employee provident fund (EPF) for three months. Both the parties will contribute 10% each of the basic salary for the period instead of the mandated 12% each. This has been done to increase cash in the hands of the employees.
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