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Employees Provident Fund & Misc. Provision Act, 1952.


The schemes of Provident Funds are meant to induce employees to save a portion from their present earnings for a rainy day.   The object of the Act is to provide for institution of Provident Fund, Pension Fund and Deposit Linked Insurance Fund for employees in Factories and other establishments.




"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; 



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 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; 



 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 or under the standing orders of the establishment; 





Exempted Establishment

An establishment which has been granted exemption from the operation of all or any of the provisions of any scheme or insurance scheme prescribed under the Act. Such exemption may be granted to the establishment or to any person or to any class of persons of the establishment.



This Act is applicable to all factories and establishments were 20 or more employees are/were employed.

The Act continues to be applicable even if the number of employees falls below 20.


Main Provisions of the Act


·         The EPF and MP Act make provisions for 3 types of schemes. These     schemes have been summarized as under





Provident fund (EPF)

Pension Scheme(EPS)

Deposit Linked Insurance (EDLI)



To provide for lumpsum payment at the time of retirement/death

To provide for monthly pension to member and his family

To provide for insurance of employee


Salary ceiling

The contribution to these schemes /fund are made on salary (Basic + DA) of Rs 6500/- Per month.


Contribution of – Employee

12 % of Basic + DA




Contribution – Employer

3.67% of Basic + DA + Any difference between actual 8.33% of Basic +DA and Rs 541/-

8.33% of Basic + DA ( subject to max of Rs 541/- (8.33% of basic + DA of Rs 6500)

0.5% of Basic + DA


Contribution-Central Govt.


1.16% of Basic + DA



Voluntary contribution of



Allowed. However employer is not bound to contribute over and above the statutory



Not Allowed

Not Allowed



@ 8.5% per year

No Fixed returns




Allowed after membership of prescribed period

Not Allowed

Not Allowed


Benefits when received by employee

At the time of retirement or death

At the time of retirement or death

For death while in service


Types of benefits

Advances For

1.    house building,

2.    marriage,

3.    LIC premium

4.    Education

Pension on

a)    Retirement

b)    Disability

c)    Commutation of Pension

Upon Death of  an employee pension payable to:

d)    Widow

e)    Children

f)     Orphan

g)    Nominee


An amount equal to average balance upto Rs35000/- + 25%of balance amount subject to max of Rs 60000/- is paid to dependents



Establishment to include all branches/departments

All the branches and departments of establishment are included in the establishment for the purpose of this Act.


Administration of Schemes

The above schemes and funds are administered  by the Employees Provident Fund Organization (EPFO). The EPFO has appointed officers at various levels to further apply the provisions of the Act e.g

Central Provident Fund Commissioners

Additional Central Provident Fund Commissioners

Deputy Provident Fund Commissioners

Regional Provident Fund Commissioners, etc

This officers are also authorized to listen to any complaints regarding contribution, benefits , etc and may pass orders suitably.


Protection against Attachment

the amount standing to the credit of account of an member cannot be attached, assigned or charged by any order of any court.


Employer not to reduce wages

 Employer cannot reduce wages of an employee by reason of his liability of contributing to the schemes under this Act.




Sl No




Avoiding payment under this Act or knowingly making false statement

Imprisonment which may extend upto 1 year or Fine which may  extend upto Rs 5000/- or both


Employer who contravenes in provisions regarding payment of administrative charges and contribution

Imprisonment which may extend upto 3 year or Imprisonment I year +Fine  Rs 10000/-


Contravention regarding payment of inspection charges

Imprisonment which may extend upto 1 year or Fine which may  extend upto Rs 5000/- or both


Same offence is committed again

Imprisonment which may extend upto 5 year and Fine of Rs 25000/-





Calculation of Member Pension

Pension is calculated separately for Past Service & Pensionable Service


Procedure for Calculation of Past Service Pension

* Find out the total past service i.e. Subtract the Date of Joining (if it is before 15.11.1995) from 15.11.1995 duly rounding off the service in years.

* Find out the salary as on 15.11.1995 as to whether it is upto Rs.2500 or more than Rs.2500

* Accordingly locate the past service benefit from the table given in 12(3)(b)

* Find out the period that had elapsed between 16.11.1995 and the date of exit and based on this period locate the corresponding Table ‘B’ Factor
      Date of Exit is
              Date of attaining 58 years for superannuation/early pension
              Date of Death for widow pension
     Date of Disablement for Disablement pension

Multiply the Past Service Benefit and the Table ‘B’ factor which gives the Past Service Pension



Procedure for calculation of Pensionable Service Pension

* Find out the Category of the member as to whether he belongs to X, Y or Z Category
                  *X – Date of commencement of pension is between 16.11.1995
                          and 15.11.2000
                  *Y – Date of commencement of pension is between 16.11.2000
                         and 15.11.2005
                  *Z – Date of commencement of pension on or after 16.11.2005

* Find out the Pensionable Service and Pensionable Salary of the member and substitute the same in the formula given in para 12(2)

* If the formula pension calculated is less than 335/438/635 respectively for X,Y,Z categories then only that minimum pension is to be given


Procedure for calculation of Total Aggregate Pension

* Add the Past Service Pension and the Formula Pension

* If the total pension is less than 500/600/800 respectively for X,Y,Z categories than that minimum pension shall be the total pension

* But this total pension is for an eligible service of 24 years or more, and if the eligible service is less than 24 years, then this total pension has to be proportionately reduced subject to a minimum of 265/325/450 depending on X,Y,Z categories (only when the minimum pension is given)

* If the total pension itself is more than the minimum then the proportionate reduction need not be made even if the eligible service is less than 24 years


The above calculation is only for existing members. For new entrants the pension is strictly as per the formula given in 12(2) without applying any minimum


Calculation of Widow Pension
* If the member dies in service then

 Widow Pension = Member Pension treating the date of death as date of retirement (or) Table ‘C’ factor (or) Rs.450, whichever is higher

* If the member dies away from service before 58

 With total service more than 10 years then

Widow Pension = Member Pension treating the date of exit as date of retirement (or) Table ‘C’ factor (or) Rs.450, whichever is higher

* With total service less than 10 years

And member is not a bachelor then

Widow Pension = Table ‘C’ factor

And member is a bachelor then

No Pension Payable but a lumpsum amount equal to ROC payable to nominee or parent

* If the member dies as a pensioner

Widow Pension = 50% of the Member Pension (or) Rs.450, whichever is higher


Calculation of Children Pension

25% of the widow pension calculated as above or Rs.150/- whichever is higher is payable to every child upto 25 years starting from the death of the member


Calculation of Orphan Pension

75% of the widow pension calculated as above or Rs.250/- whichever is higher, is payable to every child upto 25 years starting from the death of the widow/widower


Calculation of Withdrawal Benefit

Withdrawal Benefit is calculated separately for past service and pensionable service and then aggregated.

Withdrawal Benefit for Past Service = Wages as on 15.11.1995 X Corresponding Table ‘A’ factor for the past service rendered X Table ‘B’ factor for the period between 16.11.1995 to the date of exit from employment or date of attaining 58 years whichever is earlier

Withdrawal Benefit for Pensionable Service = Wages as on date of exit X Corresponding Table ‘D’ factor