Employee Provident Fund (EPF) is a mandatory social security savings scheme funded by contributions from employers and employees, providing retirement funds for salaried workers to help with housing and medical expenses.
EPF in India is stated under Employee Provident Fund Act 1952. EPF program has the option of contributing 12 percent or more of an employee’s salary while the employer contribution is fixed at 12 percent.
See also: How to Calculate an Employee’s Payroll in China? (Part III)
Employees who are covered in this program are those who have Rs.15000 or less salary. If the amount of salary exceeds Rs.15000, it is not mandatory for employees and employers to pay the fund. However, employees with more than Rs.15000 salary can be a member with permission of Assistant PF Commissioner and employer agreement.
Under the stated Act 1952, here are EPF rules for employers
To calculate EPF contribution by employee and employer, you can refer to EPF calculator. Using this calculator will require you to input the following data.
The final result of the calculation will show the total EPF balance. To calculate the total balance at the end of every year, you can calculate it as follows:
Balance at the end of 12 months (employee plus the employer contribution) + Sum of the interest earned in each month in the year
In contrast to Indian EPF, Malaysian EPF is covered under the Employees Provident Fund Act 1991 to provide for the law relating to a scheme of savings for employee’s retirement and the management of the savings for retirement purposes and for incidental matters thereto. The contribution of the employer for the EPF is listed as follows:
Employers are not allowed to calculate employer’s and employee’s share based on exact percentage except for salaries that exceed RM20,000. The total contribution which includes cents shall be rounded to the next ringgit.
To calculate EPF, you can use EPF calculator. Using the calculator, you will need to fill some of the following data:
Read also: Basic Overtime Rules and Calculations for Employers in APAC