Statutory and compliance
EPF: the provident fund line on an Indian salary slip
EPF, the Employees' Provident Fund, is a retirement savings account run for employees under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. A covered employer deducts a contribution from the employee's basic wages, adds a contribution of its own, and deposits both against the employee's account. The balance stays with the employee across jobs through the Universal Account Number.
Last reviewed: September 2026
Also called: EPF, PF, provident fund, employee provident fund
In plain English
Part of an employee's pay is set aside for their retirement each month. The company adds its own share. The money sits in an account the employee keeps for life.
How it works in detail
Whether an establishment is covered, which part of the pay the contribution is calculated on, and what the rates are all come from the Act and the schemes framed under it. The government revises those figures from time to time, so confirm the current ones with your consultant or your PF agent before you run the month. Basic wages are the usual base, which is why the split between basic and allowances matters.
Two amounts move every month. The employee's share is deducted from the salary and shows as a deduction line on the slip. The employer's share is a separate cost to the business and is deposited along with it. Both are filed against the employee's Universal Account Number, which stays with the person across jobs, so a new employer continues the same account.
A worked example
The setup
Suppose Ravi earns INR 22,000 gross in a full month. His consultant works out the provident fund deduction for that month and returns a figure of INR 1,450.
The calculation
The figure here is assumed for the example and is not a statutory rate. Gross INR 22,000 - employee share INR 1,450 = INR 20,550 before any other deduction. The employer's share of INR 1,450 is deposited on top and does not change the net figure.The result
Ravi takes home INR 20,550 for the month. His slip carries the provident fund line as a deduction, and his passbook shows both shares against his Universal Account Number.
Common mistakes
- Treating the employer's share as part of the employee's take-home. It is a separate deposit, and showing it inside gross pay makes the offer letter read higher than what the employee receives.
- Opening a fresh account for a new joiner who already has a Universal Account Number. The number is meant to follow the employee, and a duplicate leaves two balances to merge later.
- Copying last year's contribution figure into this year's payroll. The wage base and the rates are set by the government and change, so ask your consultant to confirm them before you process the month.
How VTClock handles it
VTClock does not compute, deduct or file EPF, and it generates no challan or ECR. It produces the attendance-based salary figure and the slip your consultant works from.
Frequently asked questions
Does VTClock deduct PF from my salary run?
No. VTClock records attendance, leave and advances, and produces the monthly salary figure and a printable slip from that record. Provident fund contributions, returns and challans stay with your PF consultant or accountant, who works from the salary figure you give them. Nothing in the app files anything with the department.
What is a UAN and does an employee need a new one when they change jobs?
The Universal Account Number is the single identifier that holds an employee's provident fund record across employers. The employee keeps it for their whole working life. When they join you, take the existing number and use it, so the new employment is linked to the same account. A second number created by mistake has to be merged afterwards, which takes paperwork.
Is provident fund calculated on gross salary or on basic?
The contribution is worked out on basic wages as the Act and its schemes define them, which is a narrower figure than gross salary. That is why the split between basic pay and allowances in a salary structure changes what gets contributed. The definition and the limits that apply to your establishment are worth confirming with your consultant, because they are revised.
How do LOP days in a month affect the provident fund figure?
Unpaid days lower the wages actually paid for the month, and the contribution is worked out on the wages paid. So a month with loss of pay usually carries a smaller provident fund line than a full month on the same salary. Your consultant computes the exact amount, and VTClock supplies the attendance and the salary figure it is based on.
Related terms
- ESIESI, the Employees' State Insurance, is a contributory scheme under the Employees' State Insurance Act, 1948 that gives covered workers medical care and cash benefits during...
- Basic salaryBasic salary is the fixed core component of a monthly pay structure, before house rent allowance, dearness allowance and any other allowance is added on top.
- Gross salaryGross salary is the total of everything an employee earns for a month before a single deduction is taken off: the fixed structure of basic pay and allowances, plus whatever was...
- Net salaryNet salary is what is left of a month's earnings after every deduction the employer is required or authorised to make has come off.
- Salary slipA salary slip is the statement an employer gives an employee for one wage period, setting out what was earned, what was deducted and what was paid.
- CTCCTC, short for cost to company, is the total annual amount an employer expects to spend on one employee.
Modules that touch this
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