How is provident fund composed?
Provident Fund, the full name of Housing Provident Fund, is a long-term housing savings system designed to help employees solve housing problems. It is jointly deposited by employees and employers in proportion and belongs to the individual employees. The composition of provident funds involves many aspects, including deposit ratio, base, purpose, etc. Below we will analyze the composition of provident funds in detail from a structural perspective.
1. Basic composition of provident fund
The provident fund mainly consists of the following two parts:
| components | Description |
|---|---|
| Personal deposit part | Deducted according to a certain percentage from the employee’s personal salary |
| Unit deposit part | paid by the employer in the same proportion |
2. Contribution ratio of provident fund
The contribution ratio of provident fund is stipulated by local policies, usually between 5% and 12%. The specific ratio varies by region and policy. Here are some examples of deposit ratios in some common cities:
| city | Personal contribution ratio | Unit deposit ratio |
|---|---|---|
| Beijing | 5%-12% | 5%-12% |
| Shanghai | 7% | 7% |
| Guangzhou | 5%-12% | 5%-12% |
| Shenzhen | 5%-12% | 5%-12% |
3. Provident fund deposit base
The contribution base of the provident fund is the employee's average monthly salary in the previous year, but there are usually upper and lower limits. The following is the range of deposit bases in some cities:
| city | Minimum deposit base | Maximum deposit base |
|---|---|---|
| Beijing | 2320 yuan | 31884 yuan |
| Shanghai | 2590 yuan | 34188 yuan |
| Guangzhou | 2300 yuan | 36072 yuan |
| Shenzhen | 2360 yuan | 38892 yuan |
4. Purpose of Provident Fund
The main uses of provident funds include house purchase, renting, loan repayment, decoration, etc. The following are the specific uses of provident funds:
| Purpose | Description |
|---|---|
| Buy a house | Used to pay down payment or loan for home purchase |
| rent a house | used to pay rent |
| Repay loan | Used to repay housing loans |
| decoration | Used for housing decoration |
| Others | Special situations such as extraction of serious illness |
5. Conditions for withdrawing provident fund
The withdrawal of provident funds needs to meet certain conditions, and the withdrawal conditions for different purposes are also different. The following are common extraction conditions:
| Extraction purpose | Extraction conditions |
|---|---|
| Buy a house | Provide proof of purchase contract, invoice, etc. |
| rent a house | Provide rental contract, proof of no housing, etc. |
| Repay loan | Provide loan contracts, repayment certificates, etc. |
| decoration | Provide decoration contracts, invoices, etc. |
| retire | Reaching statutory retirement age |
6. Provident Fund Management Organization
The provident fund is managed by the housing provident fund management center in various places, which is responsible for the deposit, withdrawal, loan and other services of the provident fund. The following are the governing bodies of some cities:
| city | governing body |
|---|---|
| Beijing | Beijing Housing Provident Fund Management Center |
| Shanghai | Shanghai Provident Fund Management Center |
| Guangzhou | Guangzhou Housing Provident Fund Management Center |
| Shenzhen | Shenzhen Housing Provident Fund Management Center |
7. Advantages of Provident Fund
As a housing security system, provident fund has the following advantages:
| Advantages | Description |
|---|---|
| low interest rate loan | Provident fund loan interest rates are lower than commercial loans |
| forced savings | Help employees accumulate housing funds |
| tax benefits | Provident fund deposits are exempt from personal income tax |
| Flexible extraction | Can be extracted and used when conditions are met |
Conclusion
The Provident Fund is an important housing security system that is jointly deposited by individuals and units to solve the housing problems of employees. Understanding the provident fund’s composition, contribution ratio, purpose, etc. will help you make better use of this benefit. It is recommended that employees pay close attention to changes in local provident fund policies and plan housing funds reasonably.
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