Provident Fund

Provident Fund

PROVIDENT FUND: Provident fund  is a measure for social security for workers in the organized sector.   This facility is also available to individuals and other organizations on an optional basis. If an organization has more than 19 employees this Act applies with certain conditions as laid out in the PF Act.  Temporary employees also are to be counted.  However, casual labour need not be counted as employees. 

Types of Provident Fund: There are four types of Provident Fund – Statutory Provident Fund, Public Provident Fund, Recognised Provident Fund & Unrecognised Provident Fund.  We will discuss these separately. 

Provident Fund is exempt for:    

 •co-op societies with less than 50 employees.          

 • NGOs which works with support from Govt. Grants          

 • For newly set up organizations, this is exempt for the first three   years. 

How much needs tobe deducted every month:          

• 10% of employees monthly salary            

 •  Addl.1,67%is contributed by the employer            

 • The NGO also has to deposit 8.33% for the Pension Fund          

 •  Calculate contribution on the basis of actual  salary drawn during a                month.     %

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