All you need to know about Employee Provident Fund (EPF)

Things that you must know about Employee Provident FundEPF

What is EPF?

  • Employee Provident Fund (EPF) is a scheme regulated by central government under ‘The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952′ which came into effect from 1951 which extends to whole of India except Jammu & Kashmir.
  • EPF is one of the most beneficial investment methods for salaried employee.
  • Government has initiated EPF registration and made it compulsory with certain conditions mainly for cultivating the habits of saving for all employees working in private sector, public sector or even in government undertakings.


Applicability of EPF:

Registration under EPF is Compulsory in following cases:

  • Every factory engaged in industry employing 20 or more employees.
  • Every other establishment having 20 or more employees during previous year.
  • Every employee who is earning less than INR 15,000/- per month.
  • Any other establishment employing 20 or more persons or class of such establishments which the Central Government may, by notification specify.
  • Any other establishment employing less than 20 persons or class of such establishments which the Central Government may, by notification specify.
  • Where the employer and majority of employees have agreed that the provisions of this act should be made applicable to the establishment, they may themselves apply to the Central PF Commissioner. The Central PF Commissioner may apply the provisions of this Act to that establishment after passing the notification in the Official Gazette from the date of such agreement or from any subsequent date specified in the agreement.
  • Some establishments having less than 20 employees would also be required to obtain PF registration but that is voluntary registration. All the employees will be eligible for a PF from the commencement of their employment and the responsibility of deduction & payment of PF lies with the employer.


Rate of Contribution for Establishment Hiring 20 or more Employees:

A/c No. A/c Type Employee’s Contribution Rate (%) Employer’s Contribution Rate (%)
1 PF Contribution Account 12.00 3.67
10 EPS Contribution Account - 8.33
Total 12.00 12.00
Other Administrative Charges
2 PF Admin Charges - 0.50
21 EDLI Contribution Account - 0.50


Employee’s Rate of Contribution:

  • Employee has to share his contribution at the rate of 12% of Employee’s basic salary plus dearness allowance.
  • The employee can pay at a higher rate and in such case employer is not under any obligation to pay at such higher rate.
  • To pay contribution on higher wages, a joint request from Employee and employer is required [Para 26(6) of EPF Scheme]. In such case employer has to pay administrative charges on the higher wages (wages above 15,000/-).
  • For an International Worker, wage ceiling of 15,000/- is not applicable.


Employer’s Rate of Contribution:

  • Employer has to share his contribution at the rate of 12% of Employee’s basic salary plus dearness allowance.
  • Out of total employer’s contribution, it is further bifurcated into 8.33% which is converted to Employees’ Pension Scheme, and remaining 3.67% is converted into PF Contribution.
  • Apart from this, an employer is liable to pay PF admin charges and EDLI premium.


PF Administrative Charges (to be borne by Employer):

  • PF Admin charges have been reduced from 0.65% to 0.5% applicable w.e.f. 1st June 2018.
  • Monthly payable amount under EPF Administrative charges is rounded to the nearest rupee and a minimum of Rs 500/- is payable.
  • If an employee is contributing towards PF at a wage limit of higher than Rs. 15,000 the employer has to pay administrative charges on such higher wage.
  • If the establishment has no contributory member in the month, the minimum administrative charge will be Rs. 75/-.


Employees’ Deposit Linked Insurance Scheme (EDLI):

  • The Employees’ Deposit Linked Insurance Scheme (EDLI) is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO).
  • A nominee or legal heir of an active member of EPFO gets a lump sum payment in case of death of the member during the service period.
  • The insurance amount payable is 30 times the average monthly salary of the employee up to a maximum of ₹ 6 Lakhs.
  • Form 5 IF must be filled by each beneficiary to claim the insurance amount.
  • There is no minimum service period required to be eligible for EDLI benefits.
  • All organizations covered under Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952 get enrolled for EDLI automatically.
  • EDLI Admin charges have already been waived w.e.f. 1st Apr 2017.


Contribution at Lower Rate for Certain Establishments:

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

  • Establishment with 10 or less than 10 employees.
  • An establishment which has incurred losses during the end of financial year.
  • Such other establishments such as:
    • Brick Factory
    • Jute factory
    • Beedi factory
    • Guar Gum Factory


Withdrawal of EPF Amount:

  • An employee on his retirement or attaining the age of 55, an individual can withdraw the cumulative amount of EPF account in his name. He can withdraw the whole amount in his EPF account along with the employer’s contribution.
  • In case the employee does not attain the age of 55 or is below 55 or retirement age but switches or change his employment can also fully withdraw his EPF balance in case he is not in employment for 60 days or more.
  • Now, an employee can withdraw his EPF amount which earlier was offline and hectic procedure is now Online & Easy and fast method of EPF amount withdrawal.


Following process is to be followed for withdrawing the EPF Online:

  • Go to online portal and login with the help of UAN number and Password.
  • The very first step after login is to verify the KYC details which are already uploaded at EPF employer portal.
  • Under ‘Online Services’ tab, one can choose by clicking and selecting “Claim (Form 31, 19 & 10C)” which is under drop-down menu:
    • Form 31: This form is used when employee wants to withdraw partly his EPF fund.
    • Form 19: This form is used when employee wants to withdraw entire of his EPF fund.
    • Form 10C: This form is used when employee willing to withdraw pension amount.
  • Enter the last four digits of bank account under ‘member’s detail’ menu and click’ verify’ to verify bank details.
  • Sign the certificate of undertaking.
  • Submit the online application form.

Once EPFO will scrutinize the bank details with KYC details, EPF amount request will be processed, which will be approved within 10-15 days & amount will be credited to registered and verified bank account.

Note: An employee can use this online facility for withdrawal of EPF fund only if his Aadhaar is linked to his UAN.

Registration Process:

The step-by-step registration process for EPF is as per the following:

Employer’s Registration:

Registration under EPFO portal starts with registering an organization under Employer’s registration service. Go to EPFO official website

Common Registration:

Earlier registration under EPF and ESIC was done separately which is now segregated by EPFO by creating “Common Registration Under (EPFO & ESIC)” which directly opens another tab for single common registration of EPF & ESIC.

Complete Employer’s Detail:

First and foremost complete the first part of application by completing the details of employer and creating the User-id and password at this step:

  • Complete Details of owner such as Name, Address, Email ID etc.
  • PAN of employer.
  • Username has to be selected by an employer which can be used in future for login and return filing.
  • Employer will get OTP PIN on its registered Mobile Number which has to be entered for verification.
  • Last confirmation on E-mail has to be verified to activate the employer’s login.


Login with Employer Credential:

After completing the Employer registration and email verification go to EPFO official website and login with “employer’s login” for further registration of establishment.

Registration of DSC:

DSC of an employer has to be registered in an EPF portal by clicking “establishment” from the options. Select DSC/E-Sign from drop-down menu and proceed with DSC registration.

Documents Required:
1. Name of the company. (Incorporation Certificate).
2. Company’s PAN (Proprietor’s, in case of proprietorship concern) and Incorporation Certificate.
3. Copy of the licenses available in the name of the company/Firm. (like GST/MSME).
4. Address of the company with address proof.
5. ID, Pan and Address proof of Proprietor / Director / Partner of the company.
6. Email address, Mobile number of Proprietor / Director / Partner of the company.
7. Specimen Signature as per attached format.
8. Digital Signature.
9. Details of 10 & 20 Employees (10 for ESIC & 20 for EPF) (as per Sheet attached).
10. Consent Letter as per attached format (In case EPF Voluntary Registration).


Monthly Compliances:

  • Return has to be filled every month by following necessary step.
  • Return is filled online by doing establishment login.
  • Return has to be filled before 15th of every month in ECR format.
  • Download the ECR sheets from ECR payment option under drop-down menu of Payments.
  • Complete the downloaded sheet in XML by filing the details and converting into Comma-dilemma file in TXT form for uploading the same.
  • File the return by making the Contribution payment online directly on an EPFO portal.

Blog Archive

Warning: mkdir(): No such file or directory in /home/bge9b4q3b1qk/public_html/munimji/academic/modules/mod_lca/cache.php on line 56

Warning: file_put_contents(/home/bge9b4q3b1qk/public_html/munimji/academic/cache/mod_lca/57e55f700d1772126b4bb8d207c1e29f.xml): failed to open stream: No such file or directory in /home/bge9b4q3b1qk/public_html/munimji/academic/modules/mod_lca/cache.php on line 57

Financial Management