Like us!
Follow us!
Recommend us!
whatsapp us!
Mail us!
subscribe us!
EMPLOYEE PROVIDENT FUND
EMPLOYEE PROVIDENT FUND

EMPLOYEE PROVIDENT FUND | EMPLOYEE PF

Employees Provident Fund is a scheme for the social security of the Indian Employees that is controlled by the Provident Funds and Miscellaneous Provisions Act, 1952. The Employee Provident Fund is regulated under the dimensions of Employees Provident Fund Organization also known as EPFO. EPF is a benefit to an employee during the retirement anticipates by the organization.

All establishments or organizations that have employed 20 or more than 20 employees can apply for PF registration in India. In some cases subject to the circumstances and the exemption establishments having employees less than 20 are still eligible for PF registration. The Employee gets an amount that includes the self and employer’s contribution with interest at the time of retirement or resignation.

ELIGIBLE PERSON TO GET EPF REGISTRATION

  • EMPLOYER

      PF Registration is mandatory for all the organizations:
      That has employed 20 or more than 20 employees.
      For any other establishment that has less than 20 people then the central government has to specify the same in the notice on the behalf.

  • EMPLOYEE

      Employees whose salary is less than Rs.15000 per month need to mandatorily become members of the EPF According to the guidelines, employees whose basic pay is more than Rs. 15000 a month at the time of joining are not obligated to make any PF contributions.
      But an employee whose salary is more than Rs.15, 000 can still become a member and make contributions with the employer and the Assistant PF commissioner.

AMOUNT FOR THE CONTRIBUTION OF PF


The employer has to get the PF registration within 1 month of attaining the strength, in case of failure to abide by applicable penalties. A registered establishment can continues under the purview of the Act even in case the number of employees falls below the required limit.

The employer has to contribute 12% of the (Basic Salary + Dearness Allowance + Retaining Allowance). An equal amount of contribution is to be made by the employee. If the establishment has employed less than 20 employees, the EPFO rules state that the contribution rate for both the employees and the employer may limit to 10 %. In most cases the employees employed in the private sector, their whole contribution is calculated on their basic salary.

BREAKUP OF THE PF CONTRIBUTION

    The 12 % contribution is divided into the following subdivision:

  1. 3.67% of the contribution regarding the Employees Provident Fund

  2. 1.1% of the contribution regarding the EPF administration Charges

  3. 0.5% of the contribution regarding the employee's deposit linked insurance

  4. 0.01% contribution regarding the EDLI administration charges

  5. 8.33% regarding the Employees Pension Scheme

EMPLOYEES PENSION SCHEME


8.33% of the employer’s contribution is contributed towards the Employees Pension Scheme that is calculated at Rs.15,000. The amount contributed to the Employee Pension Scheme would be Rs.1250 in case the basic pay of the person is Rs.15,000. If the Basic Pay is less than Rs.15, 000 then 8.33% of the amount will be contributed and the balance will be reserve in the EPF scheme. On retirement time, the employee would receive the full share with the employer's share reserved for credit in the EPF account.

DOCUMENTS REQUIRED FOR REGISTRATION

    The employer has to submit the following documents to apply for PF registration:

  1. PAN card of establishment

  2. PAN card of the Partner, Proprietor, or the Director

  3. Aadhar card of the Partner, Proprietor or Director

  4. Certificate of incorporation

  5. Cancelled cheque of establishment with its name pre-printed on the cheque

  6. Address proof of the establishment. It can include:

    1. Rent agreement

    2. Electricity bill

    3. Telephone bill

    4. Signature of directors and authorized signatories

    5. Digital signature of the authorized person

    6. In case of voluntary registration, consent of the majority of employees


    Some additional documents required:

  • First sale bill

  • First purchase bill of raw material and machinery

  • GST Registration Certificate

  • Bank account details

  • Record of monthly employee strength

  • Register of salary and wages details

EPF CHARGES


The contribution is round off to the nearest rupee for each of the employees for the employee share, the contribution towards pension, and the EDLI contribution.

The employer share of amount is the difference between the employee Share and the pension contribution.

The monthly payment amount towards the EPF administrative charges is rounded to the nearest rupee and a minimum of Rs.500 is payable.

In case the organization has no member in the month the minimum administrative charges applicable will be Rs.75.

The monthly payment amount under the EDLI administrative charges is round off to the nearest rupee and a minimum of Rs.200 is payable.

In case the organization has no member in the month, the payable minimum administrative charge is Rs.25

If the organization t is exempted from the PF scheme inspection charges of 0.18% (Minimum Rs 5 ) is payable in place of the admin charges

In case the organization is exempted under the EDLI scheme. The inspection charges of minimum Rs.1 @0.005% are payable in place of the administrative charges.

DUE DATE


Before paying the Salary to the employees the employer should deduct the employee's contribution from his wages. Later, the employee part of share and the employer’s share will be payable to the EPFO within 15 days of the end of every month.

The EPF is resolute in terms of returns from a debt instrument. The money is sovereign backed and the interest earned is tax-free. The PF has a status of exempt income as contributions are deductible from the income. No other debt instruments provide high returns with such safety and assurance. Therefore, it is better to transfer the PF account at the time of switching jobs and also avoid withdrawing the money before retirement.

BENEFITS OF PF REGISTRATION ONLINE

  • PENSION COVERAGE

      Besides the contribution of the employee towards the EPF, the employer adds an equal amount which is inclusive of Employee Pension Scheme (EPS). Therefore, EPF saves you a vigorous pension.

  • COVER OF RISK

      In case of illness, demise or retirement, Provident Fund also helps the dependents of the employee by providing the coverage of financial risks faced by employees in such situations.

  • SINGLE EPF ACCOUNT

      An employee can transfer their PF account while switching jobs. Universal Account Number (UAN) linked to the Aadhar will start to facilitate the linking of the previous accounts. Employee can carried forward their account to the new employer instead of being closed down. This uniformity makes sure that the rate of return is compounded over the years.

  • EMERGENCY FUND

      Emergencies can arise at any point of time in life. EPF amount can be of great help during any mishaps, illnesses, weddings and educational expenses. Employee can make claims online at anytime.

  • EMPLOYEE DEPOSIT LINKED INSURANCE SCHEME

      Any employee who has PF account is eligible for the insurance scheme that requires only 0.5 % of the salary deduction as premium.

  • EXTENDED GOALS

      The PF account can be extremely helpful for long-term goals like buying a house property or setting up a fund for children education etc.

  • CHECKING THE EPF BALANCE

      The employees who are registered under the UAN portal can get the details which are available at the Employee Provident Fund Organization (EPFO) by just giving a missed call to 011-22901406 from their registered mobile number. If the member’s UAN is linked with the bank’s account number, PAN card or Aadhar number, then the employee can easily access the PF balance and previous contribution details. Activated members of the UAN can also access their previous EPFO balance and PF contribution by sending an SMS to 7738299899 from their registered mobile.

PROCEDURE OF EPF REGISTRATION FOR EMPLOYERS

    The employer needs to follow the below-mentioned steps to register:

  • STEP 1: VISIT THE EPFO WEBSITE

      Visit the official website of EPFO and click on the “Establishment Registration” button on the home screen.

  • STEP 2: REGISTER ON USSP

      The “Establishment Registration” button on the homepage of the EPFO website will redirect the USSP (Unified Shram Suvidha Portal) sign up page. The employer has to click on the “Sign Up” button.

      On the next page, the employer has to provide the details of Name, Email, Mobile Number, and Verification Code and click on the ‘Sign Up’ button to create the account.

  • STEP 3: FILL REGISTRATION FORM

      After the creation of the account on the USSP, the employer needs to login to the USSP and select the “Registration for EPFO-ESIC” option. Next, select the “Apply for New Registration” option.

      After that two options will appear, i.e. “Employees’ State Insurance Act, 1948” and “Employees’ Provident Fund and Miscellaneous Provision Act, 1952”. The employer will need to select the “Employees’ Provident Fund and Miscellaneous Provision Act, 1952” and click on the “Submit” button.

      Upon clicking the “Submit” button the “Registration Form for EPFO” page will open and the employer have to fill all the Establishment Details, eContacts, Contact Persons, Identifiers, Employment Details, Branch/Division and Activities.

  • STEP 4: ATTACH DSC

      After filling all the “Registration Form for EPFO” and attaching the related documents, the employer has to upload and attached his Digital Signature Certificate (DSC) to the form. Once, the DSC of the employer is uploaded, the employer will receive a message of successful completion of registration form and an email from Unified Shram Suvidha Platform (USSP)with a confirmation that the EPFO registration has been completed.

      The EPFO members can keep a track of their UAN status through online methods. All you need to do is to enter your EPF number and select your state; you will automatically get the UAN status.

      All the individuals have to activate their UAN if they want to access to all the direct/online facilities provided by the Employee Provident Fund.