January 31, 2017

What is your EE and ER Amount in PF Account

The term EE and ER amount in PF refers to Employee Contribution and Employer Contribution respectively. Let us quickly go through introduction of EPF scheme so that we can clearly understand contribution amount scales.

EE and ER Amount Contribution Rate Chart

EPF (Employees Provident Fund) is a total amount which includes employee and employer contribution. The money generally invested to meet huge expenses when unexpected things happens in life. The person face unexpected things in life as he/she grows older. The unexpected things are such as severe health problems which threatens to life. The affected persons are eligible to avail EPF amount as an advance. The members too can avail it for Father, Mother and Spouse. Central government has introduced EPF scheme with purpose of paying huge lump-sum money to secure future after retirement.


The members can also go for advance withdrawal to purchase a plot, for repaying home-loan, alteration and repairing home. The member can also avail for their marriage or for family members such as daughter, son, brother and sister. In rare cases people apply for full withdrawal due to closure of establishment and for joining higher education.

For example, The person wants to partially withdraw EPF for purchasing a house, he/she must complete 5 years of contribution. Not all types of partial withdrawal requires to complete 5 years of service. The terms and conditions for applying partial withdrawal is vary. The member can also fully withdraw before completing 10 years of contribution. The person who is not willing to withdraw during employment can withdraw after reaching retirement age 58.

Why ER and ER amount is different?

EE and ER amount are different because it is calculated based upon basic pay using certain stipulated percentage. The employer calculates employees' contribution to deduct from salary automatically on every month. They also take care of depositing towards an account on behalf of employee.

EPFO is an authority established to maintain and monitor EPF accounts. EPFO comes under the Ministry of Labour and Employment, Government of India. The company which falls under certain category and satisfying conditions of EPF Act 1952 have to voluntarily join with EPFO. The person who would like to invest their part of salary on EPF must create an account through current company. The person cannot directly invest on EPF.

The 12% of basic salary of yours is a minimum amount for investing on EPF as a employee contribution. The employer have to contribute 12% of basic salary to match with employee contribution. This is called as employer contribution. Furthermore, the employer bifurcate contribution in to two parts. The one part of employers' contribution 8.33% of basic salary diverted to EPS. The remaining portion 3.67% of basic pay diverted for EPF.

For instance, The employee who is earning Rs. 15000 as basic pay, the contribution amount is Rs. 1800 which is equal to 12% of Rs. 15,000. As per the latest pay scale structure DA merges with basic pay excluding HRA for calculating wage ceiling limit. EPF is not mandatory for those who is earning basic pay more than Rs. 15000 however they can invest on EPF scheme if they have interest. The wage ceiling limit previously it was Rs. 6500.


There is also an option is available to contribute more than 12% in case an employee have interest. This is called as voluntary contribution. In such cases employer need not to match with voluntary contribution. The latest amendments says no diversion towards EPS for newly joining person on or after September 01, 2014. It is applicable only for employees who are getting salary more than 15,000 at the time of joining.

How to calculate EE and ER amount?

The contributor earns interest for EPF money based upon applicable current interest rate. EPF amount earn interest on every fiscal year whereas EPS amount not earn any interest. The interest calculated using compound interest formula. The government of India announce interest rate for every year, so there can be slightly difference while calculating total amount. EPFO has increased interest rate for the year 2015-16 from 8.75% to 8.80%. Let's go through individual terms mentioned on SMS.


A/C No - The complete format of your EPF account number. In another term it is member ID. It consists the codes of State, PF office, Account Number and Extension Code of an EPF account.

EE Amount - The total amount of deducted amount from salary.

ER Amount - Employer contribution amount till the date mentioned.

As on - The updated record of EE and ER Amount till the end of financial year. For example it gives updated details till 30th March of year.

Let us conclude that EPF and EPS is important investment for saving retirement life. The members must be aware of amendments from time to time in order to know what is happening around. Checking contribution once in a while is very important to confirm account updates are correct.