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Employee Provident Fund is a contributory scheme that gives retirement benefits to all salaried employees in India. The fund is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1956. Employee’s provident fund organization (EPFO) is the statutory body.
Provident Fund (PF) registration is a vital compliance requirement for any organization with employees.However, the process of PF registration can be complex and time-consuming, taking away valuable resources from your core business operations. Let us take care of your PF compliance needs, so that you can focus on what you do best - growing your business.
• Companies with less than 20 employees can voluntarily enroll themselves for EPF Registration.
• Companies with more than 20 employees, including both temporary and permanent employees, are required to register for EPF mandatorily.
• Co-operative societies with more than 50 employees are required to register themselves.
Companies meeting the criteria need to enroll themselves in no less than one month from the hour of arriving at this strength. In case a company fails to comply, then penalties will be levied for default.
For companies having more than 20 employees
• Contribution = 12% of Basic salary + Dearness allowance + Retention allowance.
Out of this contribution, 3.67% is transferred into EPF account of employee and 8.33% is deposited in Employees Pension Fund (EPF).
For companies having less than 20 employees
• Contribution = 10% of Basic salary
This is also applicable in case of;
1. Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction
2. Any establishment which has at the end of any financial year has accumulated losses equal to or exceeding its entire net worth, and
3. Any establishment in following industries: - Jute, Beedi, Brick, Coir and Guar gum Factories.
If an employer makes default in the payment of any contribution to the Employees' Pension Fund, or in the payment of any charges payable under any other provisions of the Act or the Scheme, the Central Provident Fund Commissioner or such officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf, may recover from the employer by way of penalty, damages at the rates given below:
• If Period of Default is less than 2 months, then 5% Rates of damages is charged.
• If Period of Default is 2-4 months, then 10% Rates of damages is charged.
• If Period of Default is 4-6 months, then 15% Rates of damages is charged.
• If Period of Default is 6+ months, then 25% Rates of damages is charged. (Here, rates of damage is a percentage of arrears per annum)
In a statement, EPFO declared that after 1st September 2021, the companies would not be able to remit month-to-month PF and allied dues for those employees whose Aadhaar numbers are not linked with UAN (Universal Account Number). In such cases, Employers will be at risk for any legal/statutory/ membership/service delivery aspects affecting such employees.
Note : *The document requirements may vary depending on the specific service you avail, and our team will promptly send you a comprehensive list of the necessary documents to facilitate the process.
Organizations that fail to register for provident fund may be subject to penalties and fines imposed by the EPFO, and may also face legal action.
Provident fund registration is a one-time process, but organizations are required to make regular contributions to the provident fund account for their employees.
A provident fund is a retirement savings scheme where both the employee and the employer contribute a certain percentage of the employee's salary to the fund. A pension fund is a retirement savings scheme where only the employee contributes to the fund and receives a pension after retirement.
The contribution rate for provident fund registration is 12% of the employee's salary. Out of this, 8.33% goes to the Employee Pension Scheme (EPS) and 3.67% goes to the Provident Fund (PF).
Yes, but only in certain circumstances such as serious illness, higher education, purchase or construction of a house, etc. Withdrawals before retirement are subject to certain conditions and require the submission of relevant documents.
No, all employees of an organization that has registered for provident fund are mandatorily required to participate in the scheme.
Yes, contributions made to the provident fund are tax-free up to a certain limit, and the interest earned on the fund is also tax-free.
You can check your provident fund balance online through the EPFO's member portal or by visiting the nearest EPFO office.
You can claim your provident fund amount by submitting a claim form and the necessary documents to the EPFO. The claim process can also be done online through the EPFO's member portal.
Yes, an employee can change their provident fund account to a new one by submitting a transfer claim form and the necessary documents to the EPFO.
Your provident fund balance is transferable to your new employer's provident fund account, or you can withdraw it subject to certain conditions.
No, an employer can only deduct provident fund contributions from an employee's salary with their consent and after providing them with the necessary information about the scheme.