The Employees Provident Fund is a workforce of India governed by the Provident Funds and Miscellaneous Provisions Act, 1952. The Employees Provident Fund is governed by the Employees Provident Fund Organization known as EPFO.
All institutions employing 20 or more employees can apply for PF registration in India. In some cases subject to conditions and relief centers employed under 20 are still eligible for PF registration. An employee receives an amount that includes personal and employer’s contribution and interest when he or she retires or resigns.
Who is eligible for EPF registration?
For the employer
PF registration is compulsory in all institutions-
- That has involved 20 or more people.
- At any other institution with less than 20 people the central government must specify the same in the notice on its behalf.
Employees earning less than Rs.15000 per month are required to become compulsory members of the EPF. According to these guidelines, employees’ basic salaries exceed Rs. 15000 per month at the time of joining is not required to make any PF donations.
But an employee earning more than Rs.15, 000 may still be a member and make donations to the employer and the PF Assistant Commissioner.
The amount for the contribution of PF
The employer must obtain PF registration within one month of receiving the power, if he fails to comply with the applicable penalties. A registered institution continues under the Act even if the number of employees exceeds the required limit.
The employer must claim 12% of (Basic Salary + Dearness Allowance + Retaining Allowance). An equal amount of contribution should be made by the employee. If the institution employs less than 20 employees EPFO rules state that the contribution rate for both employees and the employer is limited to 10%. In most cases the private sector employees have a basic salary that includes all contributions.
The breakup of the PF contribution
The 12% contribution is divided into the following categories:
- 3.67% of the contribution to the Employees Provident Fund
- 1.1% of the contribution towards EPF administrative costs
- 0.5% of the amount invested in employee deposit insurance
- 0.01% contribution to EDLI management costs
- 8.33% towards the employee pension scheme.
What is an Employee Pension Scheme?
8.33% of the employer’s contribution is directed at the Employees’ Pension Scheme amounting to Rs.15, 000. The amount transferred to the Employee Pension Scheme will be Rs.1250 in case the basic personal payment is Rs.15, 000. If Basic Pay is less than Rs.15, 000 then 8.33% of the amount will be transferred and the balance will be kept in the EPF system. On pension, the employee will receive a full share and the employer’s share of the debt owed to the EPF account.
Documents Required to Register
The employer must attach the following documents to the registration form:
Step: 1 Partner PAN, Owner, or Director
Step: 2 Proof of address (can be any service charge but should not be older than 2 months)
Step: 3 Aadhar Card for Owner, Partner, or Director.
Step: 4 Check or Bank Statement Canceled
Step: 5 Digital Signature of Owner / Partner or Director.
Step: 6 Leased / Leased Agreement or Leased If applicable.
- The contribution is shortened to the nearest rupee for each employee by job assignment, pension contribution, and EDLI contribution.
- The employer’s share is the difference between an employee’s share and a pension contribution.
- The monthly payment to the EPF’s administrative costs is reduced to the nearest rupee and a minimum of Rs.500 is payable.
- In the event that the institution does not have a member per month the minimum administration fee will be Rs.75.
- The amount of the monthly payment under EDLI’s administrative expenses is reduced to the nearest rupee and is paid at a minimum of Rs.200.
- In the event that the institution does not have a member per month, the minimum administration fee is Rs.25
- Suppose the establishment is exempt from the 0.18% PF program evaluation fee (Minimum Rs 5) paid instead of administration costs
- In the event the establishment is released under the EDLI program. A test cost of a minimum of Rs.1 @ 0.005% is payable instead of administration costs.
Before paying salaries to employees an employer must withhold an employee contribution to his or her salary. Later, part of the employee and employer share will be paid to EPFO within 15 days of closing each month.
EPF stands tall in terms of profit from a debt instrument. The money is independently funded and the interest earned is tax-free. PF enjoys EEE status (released, released, released) as donations are deducted from revenue. There are almost no debt tools that offer such a high return on security and security. Therefore, it is best to transfer the PF account at the time of the change of duties and avoid the temptation to withdraw money.
Frequently Asked Questions
PF registration should be done via EPFO. PF registration can be done online on the website.
For a leading job if the Basic and Dearness allowance is less than Rs.15, 000 per month it means compulsory registration of the EPF by the employer.
Employees earning less than Rs.15, 000 per month are required to obtain EPF registration as compulsory, and an employee earning more than the required limit requires the approval of a PF commissioner assistant to become a member.
PF registration is compulsory for all institutions with 20 or more staff members, if the institution has less than 20 staff members the PF registration is still required. An employee may be eligible for PF from the beginning of the work and liability to be held and the PF remuneration is with the employer.
It takes 20-25 days to get PF registration registered in India.