Employees Provident Fund or EPF is a scheme introduced under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Employees' Provident Fund Organization or EPFO regulates the Employees Provident Fund. It can be said that an EPF is like a normal benefit provided to an employee during his time of retirement by the organization.
PF Registration is compulsory for all organizations:
- That factory must be engaged in any industry having 20 or more persons, and
- Any other organization that employs 20 or more persons or class of such organizations or establishments which the Central Government may by notification specify on this behalf.
- The employer needs to obtain the PF registration within 1 month of attaining the total number of employees strength. In case of any failure, the establishment needs to pay penalties. A registered organization or company or business continues to be under the purview of the Act even after the employee strength falls below the minimum required employee.
- The Central Government can apply the provisions to any organization employing less than 20 employees after serving two months of notice period for compulsory registration.
- Some organizations that have less than 20 employees will also be required to obtain PF registration. This is known as voluntary registration.
- The PF contribution of the amount of 12% must be divided equally between the employer and the employee. The employer's contribution must be 12% of its basic salary. In case the entity has employed less than 20 employees, the PF deduction rate will be 10%.
Features of PF Registration
The features of PF Registration are as follows:
Mandatory Registration
The entity that has employed 20 or more employees must obtain registration within the PF department within a span of 30 days of reaching the number. This number provided is irrespective of the salary of the employees.
Voluntary Registration
The employer after obtaining the consent of the employee can get optional coverage for its business. It proves beneficial for the employees.
Employee Definition for Provident Fund
The employee definition for the provident fund is Full-time employees, Part-time employees, Working at home, contract employees or Full-time consultants.
ESIC with PF Registration
You need PF registration only when the number of employees reaches to 20. Hence, you need to obtain ESIC registration too when the number o employees reach to 10.
Benefits of PF Registration
- Coverage of Risk
- Uniform Account
- Employee Deposit Link Insurance Scheme
- Long-term goals
- Security
- Emergency needs
- Covers and secures Pension
Coverage of Risk
The most essential benefit of the Provident Fund is covering the risk of the employees as well as their dependents that may arise due to retirement or demise or illness.
Uniform Account
One of the essential aspects of the Provident Fund account is that it is steady as well as transferable. It can be transferred or carried forward to any other place of employment.
Employee Deposit Linked Insurance Scheme
This scheme applies to all the PF account holders. As per this scheme, 0.5% of the salary is deducted from the life insurance premium.
Long-term Goals
Many long term goals require the immediate availability of funds. The goals can be marriage or higher education. The saved PF amount becomes a life saviour during these type of occasions.
Security
Whenever it comes to signature security and authenticity is a priority. By way of digital signature, any type of duplication or alteration of a document is not possible.
Emergency Needs
Any type of mishappenings or illness requires urgent finance. In this type of situations, the PF amount will prove to be a great help.
Covers pension
Apart from the 12% contribution made by the employees towards the PF, an equal amount is contributed by the employer. This also includes 8.33% contribution towards the Employee Pension Scheme.
EPF Registration Process
The employer must register the organization through an online process. The employer can register his organization by providing the below-mentioned details:
- Details of the Establishment-that includes
- Name of establishment
- Address of the Establishment
- Its Incorporation Date
- PAN
- Type of Establishment
If in case the organization is a factory the following details must be provided:
- License Number of the Factory
- Date of Issue of License
- Place of Issue of License.
- If it is an MSME organization the MSME registration details must be submitted.
- eContacts: The employer needs to provide the email id and mobile number of the authorised person.
- Contact Person: Employers also needs to provide the details of the contact person. The details that need to be provided are:
- Name
- Gender
- Date of Birth
- Contact Details
- Identity Proof: The identity proof are the license information that the employers must provide.
- Details of Employment:
- Strength of Employees
- Gender
- Type of Activities
- Wages that are above the limit
- Total Wages
- Division/Branch: All the branch details such as the name and premise number and address must be presented.
- Activities: The employer must select the type of business and the business activities that is included from the available drop-down lists.
Steps For EPF Registration for the Employers
The employee must follow the steps given below:
Step 1- Register the Organization with EPFO
Step 2- Read the User Manual
Step 3- Register DSC
Step 4- Fill all the Employer's Details
Step 5- Fill all the Required Details Correctly
FAQs
- What is the amount of Provident Fund contribution by both the employer and the employees?
The employee needs to contribute 12% of the basic salary and the same amount must be contributed by the employer.
- What is UAN?
UAN is an acronym for Universal Account Number. It is allotted by the EPFO. The UAN generally acts as an umbrella for the various Member IDs that is allotted to an individual by different organizations.
- When is the PF Registration for employer mandatory?
PF Registration for the employer is mandatory if:
- The factory has 20 or more people, or
- Any other foundation or organization with 20 or more employees, or
- The class of such establishments whom the Central Government may specify by way of notice to get compulsory PF employer registration.
- What are the details required for PF registration?
Employers must provide the following details to obtain PF registration:
- Name and Address of the company.
- Head Office and its branch details.
- The incorporation date of the company.
- The total strength of the employee.
- Category of business.
- Nature of your business.
- Details of Directors or Partners.
- Basic Details of the employees.
- Salary Details of the employee.
- Bank Account details of the company.
- PAN Card.
- Is it possible to contribute a higher amount to the EPF account?
Yes, it is possible to contribute your PF account. This can be done by way of a Voluntary Provident Fund (VPF). The rules for both the EPF and VPF are the same.
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