The contributions payable by the employer under Provident fund scheme

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(1) The contributions payable by the employer under Provident fund Scheme shall be at the rate of [ten per cent] of the [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any)] payable to each employee to whom the Scheme applies:

Provided that the above rate of contribution shall be [twelve] per cent in respect of any establishment or class of establishments which the Central Government may specify in the Official Gazette from time to time under the first proviso to sub-section (1) of section 6 of the Act.

(2) The contribution payable by the employee under the Scheme, shall be equal to the contribution payable by the employer in respect of such employee:

Provided that in respect of any employee to whom the Scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding [ten per cent] or [twelve per cent], as the case may be, of his basic wages, dearness allowance and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act;

(3) The contributions shall be calculated on the basis of [basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any)] actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis.

(4) Each contribution shall be calculated to [the nearest rupee, 50 paise or more to be counted as the next higher rupee and fraction of a rupee less than 50 paise to be ignored. 

Payment of contribution:

The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer’s contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in this Scheme referred to as the member’s contribution).
In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member’s contribution) and shall pay to the principal employer the amount of member’s contribution so deducted www.epfindia.gov.in 43 together with an equal amount of contribution (in this Scheme referred to as the employer’s contribution) and also administrative charges.
It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or
through a contractor and also administrative charges. 

Definitions of Provident Fund Act terms

(aa) “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-

(i) the cash value of any food concession;

(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the

cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in

respect of his employment or of work done in such employment;

(iii) any presents made by the employer;

(bb) “Contribution” means a contribution payable in respect of a member under a scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies;

(cc) “controlled industry” means any industry the control of which by the Union has been declared by a Central Act to be expedient in the public interest;

(dd) “employer” means-

(i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier,

the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under clause f of sub-section 1 of section 7 of the Factories Act, 1948 (63 of 1948), the person so named; and

(ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the

establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing

director or managing agent;

(ee) “employee” means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who gets his wages directly or indirectly from the employer, and includes any person,-

(i) employed by or through a contractor in or in connection with the work of the establishment;

(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961) or under the standing orders of the establishment;

(ff) “exempted employee” means an employee to whom a Scheme or the Insurance Scheme, as the case may be, would, but for the exemption granted under section 17, have applied;

(fff) “exempted establishment” means an establishment in respect of which an exemption has been granted under section 17 from the operation of all or any of the provisions of any Scheme or the Insurance Scheme, as the case may be, whether such exemption has

been granted to the establishment as such or to any person or class of persons employed therein;

(g) “factory” means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power;

Employees Provident Funds & Miscellaneous Provisions Act

An Act to provide for the institution of provident funds, pension fund and deposit-linked insurance fund for employees in factories and other establishments.

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 This Act may be called the Employees Provident Funds and Miscellaneous Provisions Act,1952. It extends to the whole of India except the State of Jammu and Kashmir. Subject to the provisions contained in section 16, it applies -

(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are

employed and

(b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may,

by notification in the Official Gazette, specify, in this behalf:

Provided that the Central Government may, after giving not less than two months notice of its intention so to do, by notification in the

Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be

specified in the notification.

 Notwithstanding anything contained in sub-section 3 of this section or-sub-section 1 of section16, where it appears to the Central

Provident Fund Commissioner, whether on an application made to him in this behalf or otherwise, that the employer and the majority of

employees in relation to any establishment have agreed that the provisions of this Act should be made applicable to the establishment,

he may, by notification in the Official Gazette, apply the provisions of this Act to that establishment on and from the date of such

agreement or from any subsequent date specified in such agreement.

An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons

employed therein at any time falls below twenty.