Statutory
VPFVoluntary Provident Fund
VPF is an employee's voluntary contribution to PF above the statutory 12 percent, earning the same interest, with no matching employer share.
An employee can ask to contribute up to 100 percent of basic to PF. The extra amount is deducted through payroll and deposited with the regular contribution.
Interest on employee contributions above ₹2.5 lakh a year is taxable since 2021.
In Indian payroll
VPF is popular because it earns the PF rate, around 8.25 percent, tax-free within the limit. Payroll must carry it as a separate deduction and report it in the ECR.
What is VPF?
VPF is an employee's voluntary contribution to PF above the statutory 12 percent, earning the same interest, with no matching employer share.
Why does VPF matter in Indian payroll?
VPF is popular because it earns the PF rate, around 8.25 percent, tax-free within the limit. Payroll must carry it as a separate deduction and report it in the ECR.
Related terms
In Kuzhu
The Payroll module in Kuzhu is where VPF is handled, on the same employee record as everything else.
WhatsApp us