The additional contribution of 1.16 per cent of your basic salary will be managed from the employer’s contribution to social security schemes run by the EPFO.
If you also want to take advantage of more pension, then the government has taken a relief decision for you. If you opt for higher pension, the additional contribution of 1.16% of your basic salary will be managed out of employer’s contribution to social security schemes run by EPFO. The Labor Ministry has made it clear that out of the total 12% contribution of the employer in EPFO, 1.16% additional contribution will be taken.
At present, the government pays 1.16% of basic pay up to Rs 15,000 basic salary as subsidy for contribution towards EPS. Employers contribute 12% of basic salary to social security schemes run by EPFO. Of the 12% contributed by the employer, 8.33% goes to EPS and the remaining 3.67% is deposited in EPF.
Will not have to pay extra contribution now
Now you are also an EPFO member and opting to contribute your basic salary over and above the cap of Rs.15,000 per month to get higher pension, you need not contribute additional 1.16% towards EPS. Now if you choose the option of more pension, there will be no difference in the salary coming in your account.
The Supreme Court had given this instruction
The Supreme Court had capped the contribution to the members at the rate of 1.16% of their salary in excess of Rs 15000 per month as an additional contribution under the revised scheme for opting out of the provisions of the employees. The court had also directed the officials to make necessary adjustments in the scheme within 6 months.
