PF and SSF contributions are generally calculated on basic salary. Income tax uses annual taxable employment income, which can include salary, allowances, overtime, bonuses, taxable benefits and employer retirement contributions, after applicable deductions and exemptions. The contribution base and the tax base are not the same.
The rates
All percentages are of basic salary. Allowances, overtime and bonuses don't attract these contributions.
| Scheme | You pay | Employer pays |
|---|---|---|
| Social Security Fund (SSF) | 11% | 20% — includes 10% provident fund and 8.33% gratuity |
| Employees Provident Fund (EPF) | 10% | 10%, plus 8.33% gratuity set aside separately |
| Contribution-based pension (civil servants from 2076) | 6% | 6% (government) |
| Citizen Investment Trust (CIT) | Voluntary, any amount | — |
Where SSF's 31% goes
The 11% you pay and the 20% your employer pays go into four schemes: 28.33% to old-age protection (provident fund, additional provident fund and gratuity), 1% to medical, health and maternity, 1.4% to accident and disability, and 0.27% to dependent family protection.
So SSF isn't extra money on top of provident fund and gratuity — it replaces them and adds insurance-style cover. By law, formal-sector employers must enrol staff in the SSF, though not every employer has moved over yet.
How it changes your tax
Employment-income wording reviewed against the IRD FAQ on 7 November 2026. Its historical rate tables are not used here to revise FY 2083/84 rates or deduction caps.
- SSF members don't pay the 1% social security tax on the first Rs 10 lakh of taxable income. Provident Fund or CIT alone doesn't waive it.
- Your employer's contribution counts as part of your income, and then the combined contributions (yours, your employer's and CIT) are deducted — up to one-third of your income or Rs 5 lakh a year, whichever is lower.
- CIT is a common way to use more of that Rs 5 lakh limit and lower your tax, at the cost of locking the money away.
Worked examples
Monthly figures for a basic salary with no other allowances, on the FY 2083/84 rules. They come from the same calculator linked below. Its PF option assumes employer deposits of 10% PF plus 8.33% gratuity qualify as retirement contributions; a gratuity amount only held in an internal reserve may not match this estimate.
| Basic salary / scheme | Your contribution | Tax (TDS) |
|---|---|---|
| Rs 50,000 · SSF | Rs 5,500 | Rs 0 → take-home Rs 44,500 |
| Rs 50,000 · Provident Fund | Rs 5,000 | Rs 450 → take-home Rs 44,550 |
| Rs 50,000 · none | Rs 0 | Rs 500 → take-home Rs 49,500 |
| Rs 1,20,000 · SSF | Rs 13,200 | Rs 2,347 → take-home Rs 1,04,453 |
| Rs 1,20,000 · Provident Fund | Rs 12,000 | Rs 3,300 → take-home Rs 1,04,700 |