What is the penalty for late PF deposit by an employer in India?

An employer who deposits EPF contributions after the due date (the 15th of the following month) is liable for both interest and damages. Interest is charged at 12% per annum under Section 7Q for the entire period of delay, and damages under Section 14B are levied at 1% per month of the overdue amount, following a rate reduction notified in June 2024 (the earlier slab ran from 5% to 25% per annum based on the length of delay).

The law treats a brief administrative delay the same as a deliberate default — any contribution reaching EPFO after the deadline triggers the penalty framework automatically. Persistent or fraudulent defaults can additionally attract prosecution and imprisonment under the Act. Because penalties accrue per month of delay, even small repeated delays can compound into a substantial liability, so on-time deposit is the only reliable safeguard.