Employee Provident Fund Registration

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What is EPF?

Employee Provident Fund is a defined benefit plan where employer and employee contribution is made after calculating the retirement benefits ahead of time.

Eligibility & Registration for EPF

Any entity that has 20 employees can obtain for Employer Identification Number (EIN Number), and in case the strength is less than 20, it can voluntarily apply for EIN. These employees include temporary workers, daily wage workers, security, housekeeping staff, contractors, temporary employees etc.

The entity must apply and receive the Employee Provident Fund Registration certificate within 30 days of having a strength of 20 employees.

  • Registration is mandatory for a factory with 20 employees or more

  • Any other organization or establishment that is specified by the Central Government where it makes

  • Compulsory to obtain PF registration even if the strength is less than 20

  • Registered organizations continue under the purview of the Act irrespective of employee strength

  • All co-operative societies continue to register themselves with a strength of more than 50 employees

FAQ

  • 1. Is it compulsory for the all the employees to contribute to the Provident Fund?

Employees drawing basic salary up to Rs. 15,000/- have to compulsory contribute to the provident fund and employees drawing above Rs 15,000/- have an option to restrict up to Rs.15,000/- or may contribute on actual salary.

  • 2. What is the contribution percentage to the Provident fund and Pension Scheme?

Employers contribution of 12% of basic salary is totally deposited in provident fund account whereas out of employees contribution of 12% , 3.67% is contributed to Provident Fund and 8.33% is deposited in Pension Scheme.

  • 3. What is basic salary under EPF?

Wages means all emoluments which are earned by an employee while on duty or in accordance with the terms of the contract of employment and which are paid or payable in cash to him but does not include:

  • The cash value of any food concession

  • Any dearness allowance (that is to say, all cash payments by whatever name called paid to an employees on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment.

  • 4. Whether the PF has be deducted when the actual wages are not paid to the employee?

Employer has to deduct and remit PF even though actual payment has not been made.

  • 5. Can an employee pay contribution in excess of the statutory rate of 12%?

Yes, the member can pay voluntary contribution in excess of his normal contribution of 12% of Rs.15,000/-. The total contribution i.e voluntary + mandatory can be up to Rs.15,000/- per month (The employer may restrict his own share to statutory rate). The member can also contribute on higher wages i.e., >15,000/- after getting permission from APFC/ RPFC as per the provisions of para-26(6) of the Scheme.

  • 6. How the contract employees are protected and given their P.F. when the contractor is not paying the dues to the principal employer?

  • It is the duty of the principal employer to ensure that the Contractor discharges his liability.

  • The Principal Employer must allow payment of bills after ensuring that the Contractor has enrolled and complied in respect of all eligible contract employees every month.

  • The Principal Employer can check the remittance and employee name by using the Establishment Search option available in www.epfindia.gov.in.

  • If the Principal Employer ensures that all contract employees activate their Universal Account Number (UAN), then any default by the contractor can be nipped in the bud.

  • 7. EPF deducted from employee salary but not paid to EPFO. What is the remedy?

  • The EPFO will invoke penal provisions to recover the dues from the employer.

  • Complaint can be lodged with police by EPFO for action against such employers.

  • 8. In case of change in employment whether a member can get his PF account transferred?

Yes, PF account transferred to his present establishment.

  • 9. Whether an employee can become a member of the EPF without any restriction to his salary / wages?

  • The employees who are drawing the basic wages and dearness allowance up to Rs.15, 000/- are alone eligible to become a member.

  • Employees drawing more than Rs. 15,000/- can also become a member of EPF by giving option under para 26(6) of the EPF Scheme.

  • The option has to be submitted to the EPF office within 6 months of joining of such member.

  • 10. Whether an apprentice can become a member of the EPF?

No, but when he ceases to be an apprentice he should enrolled immediately.

  • 11. Whether an employee can become a member of the Pension Scheme only, without contributing to the PF?

No. By virtue of membership of Provident Fund only one can become a member of the Pension Scheme. From 01/09/2014 any new employee joining an establishment and drawing basic wage more than Rs. 15,000/- per month can only become a member of the PF after submitting option as per the provisions of Para 26(6) of the EPF Scheme. However, he cannot get the membership to the Pension Fund. Both employee share of 12% and employer share of 12% contribution shall be paid into the Provident Fund only for all such employees.

  • 12. What was the interest rate if employer fail to contribute to EPFO?

At present, liable to pay simple interest rate 12% p.a.

  • 13. If an employee, during his or her suspension, is paid subsistence, is PF contribution payable?

No, PF contribution is not payable under such circumstances.

  • 14. If an employee is paid on daily basis how is the contribution determined?

The contribution is determined based on the wages paid in a calendar month.

  • 15. After leaving service, can the employee contribute to EPF?

No, the employee cannot contribute towards EPF under such circumstances as the member’s and employer’s contribution should match.

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