Introduction to EPF (Employees Provident Fund)

EPFO is one of the social security organizations with a large volume of financial transactions taking place in the country. EPF benefits are availed by the employees on their retirement in the form of amounts accumulated in the Provident Fund.  Employee Provident Fund which is commonly known as EPF, is basically a scheme governed and regulated by the Employee’s Provident Fund Organization (EPFO). EPFO is regulated and administered under the Employee’s Provident Funds & Miscellaneous Provisions Act 1952.

EPF Registration for Employers and Employees – Eligibility Criteria

The following categories of the Employers and Employees are mandatorily required  to obtain EPF registration:

• Factories having 20 or more employees during any time of the year engaged in any industry
• Any other establishment employing 20 or more employees during any time in the previous year
• Any Establishment requires compulsory registration irrespective of their employees when the Central Government, after giving two month’s notice to the particular establishment. Such establishments shall get themselves registered immediately upon the receipt of the notice.
• For any employee who is earning less than INR 15000/- per month
  

  Procedure for EPF Registration for Employer

  Step 1– First, register the organization in the “EPFO Portal” It will appear as “Establishment Registration.”

  Step2- Then, read the instruction manual as provided for a user before starting towards the registration process. 

  Step 3– Employer is required to obtain DSC (Digital Signature Certificate) for registration. After getting DSC, a fresh application to be filed for the EPF registration.

  Step 4– Thereafter, UAN (Universal Account Number) is generated. 

  Step 5– Fill the employer details after clicking on the register button.

  Step 6– Fill first name, employer PAN number, user name, mobile PIN, and activate email link for EPF registration online.

  Documents for EPF registration

  • PAN card
  • Address Proof
  • ID proof
  • GST registration certificate
  • Sale bill and purchase bill
  • Salary and PF account details
  • Banking Details
  • Cross cancelled Cheque
  • Copy of partnership deed when it is a registered partnership firm.
  • A copy of the Certificate of incorporation when it is a Public or Private Limited Company
  • A copy of their registration certificate in case of society.
  • A copy of MOA and AOA
  • A copy of the rules and objects of the society.
  • Legal documents required under the Income Tax Act.

  What is the PF number format?

  UAN Number stands for Universal Account Number, which is allotted to employees at the time of registering an employee under the EPFO portal. This number is allotted by providing the required details such as name, father’s name, Aadhaar number, PAN number, Date of birth, etc. Universal account number or UAN is a 12-digit number allotted to each Employee Provident Fund member by the Employee Provident Fund Organization(EPFO), which gives him control of his EPF account and minimizes the role of employers. UAN registered number can be used by an employee throughout his tenure of service, whether he changes his job or establishment.

  Contribution percentage of EPF

  Rate of Contribution for establishment hiring more than 20 employees:

  • Employer’s rate of contribution:Employer has to share his contribution at the rate of 12% of Employee’s basic salary plus dearness allowance.
  • Employee’s rate of contribution:Employer has to share his contribution at the rate of 12% of Employee’s basic salary plus dearness allowance.

  Rate of Contribution for establishment hiring less than 20 employees:

  As per the EPFO rules, following establishment has to contribute at the rate of 10% of basic salary plus Dearness Allowance

  • Any establishment having less than 20 employees are employed.
  • Any sick industrial company as declared by the Board for Industrial and Financial Reconstruction
  • Any establishment which has at the end of any financial year, accumulated losses equal to or exceeding its entire net worth and
  • Any establishment in the following industries:- (a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum Factories

  Benefits of Employee Provident Fund

  • EPF is availed by the person who receives a salary from the organised sector. The contributions made in EPF funds are important for both the employer and the employee and provides tax exemption
  • In some company in which the government has its shares also contributes to the EPF funds.
  • EPF gets mature when he ends its service in the organised sector or when the employee reaches the age of 58 years. The employee can withdraw the EPF funds, after two months from the termination or resignation.
  • In the case of EPF interest rate the returns are generated on the EPF account
  • The employee has the EPF account can obtain loan up to 50% of the amount deposited in the account for marriage and education after completing seven years of service whereas he can get up to 90% of the deposited amount for the home loan after the ten years of the service.