Is EPF calculated on gross salary or basic salary?

On PF wages — basic salary plus dearness allowance — not on full gross. Allowances outside PF wages are excluded from the 12% calculation.

What is the maximum EPS contribution per month?

₹1,250 — which is 8.33% of the ₹15,000 wage ceiling. When basic+DA exceeds ₹15,000, EPS stays capped and the employer's remainder goes to EPF.

Do both employee and employer pay 12%?

Yes, 12% each of PF wages — but the employee's share all goes to EPF, while the employer's is split between EPS and EPF.

How EPF is calculated on salary

EPF is calculated on basic salary plus dearness allowance. The employee contributes 12%, all of it to EPF. The employer also contributes 12%, split as 8.33% to the pension scheme (EPS, computed on wages capped at ₹15,000) and the remaining 3.67% to EPF, plus EDLI and administrative charges.

The two 12% contributions are not symmetric

The employee's 12% of PF wages goes entirely into the EPF account. The employer's 12% is split: 8.33% funds the Employees' Pension Scheme, but only on wages up to the ₹15,000 ceiling (a maximum of ₹1,250 per month), and everything else lands in EPF. On a ₹30,000 basic, the employee contributes ₹3,600; the employer's ₹3,600 splits into ₹1,250 EPS and ₹2,350 EPF.

EDLI and admin charges ride along

Employers additionally pay EDLI (insurance) and EPF administrative charges on top of the 12%. They are small percentages, but statutory — a compliant payroll must compute and remit them with the monthly ECR.

How Flocci Work Suite does it

The EPF engine applies exactly this formula inside every payroll run — 12% employee share, EPS/EPF employer split with the ₹15,000 cap, EDLI and admin costs — and the finalized run exports a portal-ready PF-ECR file, so the calculation and the filing can never disagree.

Frequently asked questions

Is EPF calculated on gross salary or basic salary?: On PF wages — basic salary plus dearness allowance — not on full gross. Allowances outside PF wages are excluded from the 12% calculation.
What is the maximum EPS contribution per month?: ₹1,250 — which is 8.33% of the ₹15,000 wage ceiling. When basic+DA exceeds ₹15,000, EPS stays capped and the employer's remainder goes to EPF.
Do both employee and employer pay 12%?: Yes, 12% each of PF wages — but the employee's share all goes to EPF, while the employer's is split between EPS and EPF.

Keep reading

Statutory rules summarized as of 2026-07-29. Rates and thresholds change — always confirm against the current EPFO, ESIC and Income Tax department notifications before filing.