What is meant by Provident Fund?

Provident Fund: Provident Fund is a retirement benefit and a special social security measure to save for old age of employees.It is the some total of contribution of employee as well as employer.A certain percentage say 12% contribute employee and same as employer.this contribution is made every month form employee salary and employer also contribute the same every month.the fund is accumulated or returned on resignation.

Criteria : An organization who is having minimum 20 employee.This is mandatory rule for all organization who is having 20 or more employees in the organization for PF contribution.

PF Calculations:

Employee contribution - 12%
Employer contribution - 12%+1.61%
Bifurcation of Employer contribution
12% into 2 parts = 8.33% Pension fund
3.67% PF
and 1.61% into 3 parts = 1.1%- Admin charges
0.01% admin charges on EDLI
0.5% on EDLI

Provident fund comes under provident fund and Miscellaneous provisions act. according to this act it provides compulsory contribution fund for the future of an employee after his retirement or for his dependents in case of his early death.

This applicable to whole of India except the state of Jammu and Kashmir.

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What is meant by Provident Fund?

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