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Employee Provident Fund (EPF) is a pension plan for all the salaried employees in public and private sectors regulated and administered by Employee Provident Fund Organization (EPFO). Employees regularly contribute to their EPF accounts, which helps them prepare for retirement, pay off loans faster, and even pay for their children's college tuition.
Organizations who fall under this scheme must register to ensure that their employees don't lose their right to a provident fund and contribute to their overall well-being.
The following categories of companies are eligible for EPF registration:
Companies with fewer than 20 employees are not required to register for the EPF scheme. However, they can register voluntarily.
The EPFO accepts registrations either in person at the EPFO office or through their website. Nowadays, the most popular and convenient approach is to go online.
Here is the process for registering for EPF online as an employer:
Employers can register EPF offline by visiting their local EPFO office.
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Employers need to download the registration form via the EPFO official website and register themselves by providing the following information:
Here are the employees that come under the EPF scheme:
The employees that don't get covered under this scheme are,
The main benefit of providing fund registration is that it covers both employees and their dependents from risk, which refers to an employee's retirement, illness, or death.
An employee is not required to create a fresh account whenever he joins a new company. EPF account is continuous and transferable.
All the EPF account holders are linked with the Employee Deposit Linked insurance Scheme (EDLIS), which deducts 0.5% of their salary.
The EPF funds can be used for the employee's needs in the event of a marriage, higher education, or other unforeseen circumstances.
The employer also needs to contribute the EPF fund, around 12% of the employee's monthly salary. The Employee Pension Scheme (EPS) receives 8.33% of the employer's contribution, which helps the employee save for retirement.
The employer and the employee's contribution rates based on the employee's strength are listed below.
Here are the contribution rates for the company with more than 20 employees.
Contribution Rate of Employer The concerned employer is supposed to contribute 12% of the employee's basic wage and Dearness Allowance (DA) as their share of contribution.
Contribution Rate of Employee The employee is expected to contribute 12% of his basic monthly wage.
Below are the companies that need to contribute 10% of the employee's basic salary along with the Dearness Allowance(DA).
If a company delays in registering for the EPF, the EPFO will impose a penalty, which is detailed in the table below:
|Sr.No||Delay in Months||Percentage of Penalty (P.A)|
|1||Upto 2 months||5 %|
|2||2 to 4 months||10%|
|3||4 to 6 months||15%|
|4||> 6 months||25%|
The EPF registration is a safe and secure scheme launched by the government of India. Registration of an individual employee's provident fund is a critical aspect of a company's financial operations. This helps your organization build credibility and also your employees feel more fulfilled in their professions. The provident fund helps employees save money for their retirement as well as helps them feel comfortable about Investing their money in case there is some financial uncertainty.
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