Implementation of pandemic relief related EPF changes in Zoho Payroll

In view of the COVID-19 pandemic, the Government of India has announced a few financial relief measures. One of these, is the reduction in employer and employee PF contribution rate from 12% to 10%. The new rate is applicable for three months: May, June, and July.

According to the existing configuration, the employer contributes 12% of the PF wages towards the employee's Employee Provident Fund (EPF) and the employee also contributes 12% of the PF wages towards the EPF.
Under the new rule, the employee and the employer can choose to contribute only 10% of the PF wages individually towards EPF. This will benefit employees by allowing them to have more take-home pay during this crisis.

How is this implemented in Zoho Payroll?

In Zoho Payroll, we have implemented the necessary changes so that employers can opt for either the reduced rate (10%) or the existing rate (12%) for the PF contribution.

To enable the new PF contribution rate across your organisation:

Make sure you have completed the pay run for April 2020.
Go to Settings > Statutory Components.

Click Enable Now to opt for the new rule for all your employees.

Click Proceed.

Once you've enabled it, EPF will be calculated with the PF contribution rate of 10% for both the employer and the employee.

All of your employees' salaries will be recomputed with the new PF contribution rate off 10% and you will receive a notification via

email to acknowledge that the new rule has been successfully implemented in your organisation.

If you want to revert to the previous configuration, click Enable 12% EPF Rate. You can revert the configuration before the May pay run is processed or after the June pay run is processed.

How to customize the contribution rates for employees

If some of your employees prefer to opt for the old PF configuration rate (12%), you can select that rate for them individually.

Go to the Employees module.
Click the More icon > Export Data > Employee Statutory Details.

Check Protect this file with a password if desired.

Export the file.
Edit the file and change the EPF contribution to 10% in the Employee EPF Percent column for employees who wish to opt for the new rate and save the file.
Now, in the Employees module, click the More icon.
Select Import Data.
Click Next.
Upload the file and select the format of character encoding.
Click Next.

Map all the relevant fields in the field mapping page.
Click Next.

Review the mapped fields and click Import.

You can also use this method to directly import EPF rates in bulk for employees.

What should I do in case I encounter errors?

If there are any errors while configuring the new rates, you can find the affected records through the status on the EPF settings page.

Additionally, an email will be sent to you with the list of employees for whom the new rates weren't enabled.

Usually, this error occurs due to a rounding-off issue during the PF calculation. To resolve this, you can export the employee list and manually add ₹12 to each of your employees' salaries. Next, import the list in the Employees module.

If you need any clarification, let us know in the comments section. You can always reach out to us on support@zohopayroll.com if you need further assistance.
Stay safe.

Sincerely,

Supriya A
The Zoho Payroll Team