Your Take-Home Salary May Increase-Here's Why?

Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts


    The government is considering increasing the take-home salary of a salried employee by cutting on the mandatory social contribution percentage that is likely to boost consumer spending pattern. As per a leading business daily which cited a government official that the labour ministry committee that is working on the contributory limit by the government for universal social security is most likely to prescribe a limit that is at least lower by 2% in comparison to the current ceiling pegged at 24%.

    Your Take-Home Salary May Increase-Here's Why?
     

    In the current scenario, an employee contributes 12% of his basic pay towards the Employee Provident Fund scheme while the employer contributes the similar portion but in two different heads i.e. 3.67% of the basic pay of the employer is contributed to the employee's EPF account and remaining 8.33% towards employee's pension scheme or EPS.

    Reason for the increase in take-home pay

    As per the same report, it is suggested that the EPF contribution by both the employee and the employer towards the employees' EPF kitty can come down to 10% as against the mandate of 12% for both of them. It is to be noted that already for set-ups or firms wherein less than 20 people are employed, the contribution limit is already pegged at 10%. But the same as per the working by the committee can apply to all establishments.

    Further the report said that once the recommendations to this effect are put in final shape by the committee , the consultation with the stakeholders will be called for, post which the directive will be put to work in the social security code of the government.
    Also, the government is working to increase the total base under the social security scheme from the current count of 10 crore individuals to 50 crore.

    In case of the employees working in the private sector, the cost to the company factors in the employer's contribution to EPF and EPS and the same in case of reduction will now be available in some other heads to the employees and as a result their take-home pay will increase.

    Goodreturns.in

    Read more about: pf epf eps
    Story first published: Wednesday, August 1, 2018, 15:44 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    Get Latest News alerts from Goodreturns

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more