Hello, in this post, we will discuss the guide to EPF rules for employer. We will cover the following:
- Employees provident fund act 1952 – An Introduction
- Recent changes to EPF
- Deduction of EPF
- EPF rules for employer
- Regular EPF-related tasks for employers
Employees Provident Fund Act, 1952
Employees Provident Fund was established in the year of 1952. Hence the Act is named as Employees Provident Fund and Miscellaneous Provisions Act, 1952. This act extends to the whole of India except Jammu and Kashmir. Basically, the Provident Fund is a welfare scheme for the benefits of the employees. Both employer and employee contribute their share of the amount but the whole of the amount is deposited by the employer. The employer deducts the employee share from the salary of the employee. So, the accumulated amount can be withdrawn if certain conditions are met.
Recent changes to EPF
- The claim settlement period for PF withdrawal is now just 10 days
- Aadhar Card is compulsory for pensioners and subscribers.
- EPF contribution rate for the newly recruited female employees has been reduced from 12% to 8%. This will be available to the new female employees for the first 3 years of employment.
- Employers must consider special allowances paid to the employees as a part of the “Basic Wage” for deduction towards provident fund.
- EPFO subscribers can now withdraw 75% of their PF after 1 month of unemployment. Also, the remaining 25% of the amount can be withdrawn after 2 months of unemployment.
- Women employees resigning to get married can withdraw their 100% without waiting for two months.
- TDS will attract at the time of payment if the PF accumulated balance is more than Rs. 30,000.
- The facility of offline withdrawal has been completely withdrawn.
- Contribution by an employer -The contribution made by the employer is 12% of the basic salary of the employee. However, this 12% is further subdivided into:
- Employee Pension Scheme (EPS) – 8.33%
- Employee’s Provident Fund (EPF) – 3.67%
- Contribution by an employee – Contribution towards EPF is deducted from the employee’s salary. This is 12% of the basic salary of the employee.
We all know that, if Basic+DA is less than Rs.15,000, then both the employer and employee contribution will be the same. If the amount exceeds Rs.15,000 then you have an option to either contribute based on the original amount or restrict the calculations to Rs. 15,000.
Employee deposit linked insurance Scheme (EDLI) – Under this scheme, the employer has to make a contribution of 0.5% of the total wages upto a maximum amount of Rs. 15,000 every month. The maximum benefits availed is upto Rs. 7,00,000 under this scheme. Employees will not contribute to this scheme from their salary.
EDLI scheme is available for all private-sector PF account holders who join the EPF and EPS.
EDLI provides the benefits in case of an unfortunate death/funeral of an insured person. The nominee can claim for an amount by attaching the Form 5(IF) along with the attested copy of the death certificate. But, Form 5(IF) will be filled up separately. And if there is no nominee registered under this scheme, the amount will be given to the heir apparent. And the limit of benefits is decided by the last drawn salary of the employee. The amount to be payoff will calculate –
[Last 12 Month of Average Salary of the Employee (covered at Rs.15,000/- P.M) x 30] + Bonus Amount (Rs.2,50,000).
EPF rules for employer
We know that the contributions from employees as well as employers get added to the EPF. The latest changes made in the EPF rules are the following –
Revise of minimum salary limit – The employee with a monthly salary less than or equal to 15000 will have to contribute mandatory towards EPF.
Change in the pension amount – The minimum monthly pension amount was set at Rs. 1000 for the widow of a member of the Employees’ Provident Fund. For children and orphans, it is set at Rs. 250 and 750 per month respectively. The pension amount will be calculated as per the average salary of the last 60 months.
Insurance Coverage – The coverage amount has now been increased to Rs. 7,00,000 per member.
Employer Contribution towards EPS – The employer’s contribution towards EPS is increased to Rs. 1,250 per month irrespective of the salary even if it is below or above Rs. 15,000 per month.
Change in employee limit – Even though an organization has only 10 employees they are eligible for EPF contribution.
Withdrawal of EPF – Withdrawals are made from EPF account for financing an insurance policy, buying or building a house and other situations mentioned in the EPFO website.
EPF-related tasks for employers
- PF Registration
- Correction of Personal Details
- Generate UAN
- Upload KYC
- PF Payment
- PF Returns
- Inform UAN number and EPF ID
The employer who is a part of the EPF scheme has to do some regular tasks. They have to pay to EPFO for the administrative expenses. With the arrival of UAN and online portals, these tasks have become a lot easier.
An employer can also create trust to manage the EPF contribution. For this reason, an employer is not required to remit EPF contribution as it goes to the private trust. Instead, the trust should provide an equal or higher return than the EPFO.
The employer with the help of Form 11 will register a new employee into the EPF scheme. However, it is not submitted to the EPF office, but the employer keeps it with himself and uses it to fill up the online form.
Correction of Personal Details
The employer should verify the authenticity of the employee. Therefore, before linking UAN with Aadhaar, the errors in the personal details of members like wrong spelling should be fixed by the employer.
The employer generates the UAN for the new employee who does not have an existing UAN. To make a new UAN, the employer has to login UAN employer portal.
KYC is mandatory for the withdrawal of EPF. The EPFO needs the PAN, Bank account number and Aadhaar or other KYC details of each EPF member. Hence, It is the responsibility of the employer to furnish the KYC details of its employees. But older employees may not have these KYC details.
The employer needs to verify the details before giving approval for an EPF member of the company to upload his/her KYC details online.
An employer has to pay the EPF contribution to the EPFO every month. The employer has to pay the EPF contribution within 15 days of the next month. If the deadline is missed the company will be in the defaulter list and they have to pay a penalty for the default period.
An employee has to file a return of monthly payment by logging in to the UAN employer portal and filling the ECR. The employer gives details of the employees, their salary as well as contribution. Then EPFO updates the passbook of every employee. It is tallied with the aggregate of the EPF amount paid and the employer files an annual return.
Inform UAN number and EPF ID
The employer should inform about the UAN and EPF member ID to its employee. It is usually printed in the salary slip. The employer persuades its employees to activate their UAN in order to do EPF related tasks online.
- Documents required for PF and ESI registration
- Payment and filing due dates for PF, ESI, and TDS
- Steps for PF online payment on the EPFO portal
- PF admin charges – A quick guide
Here ends the post about the EPF rules for employer. Also, we like to hear from you in the comments section below.
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I am working in a MNC, where we have union/Employer decides the yearly package.Doe’s my packge includes employer pf contribution or should not be a part of the package.
Employer PF contribution will be a part of your CTC.
My PF contribution is Rs.7350 how much company contribution in this case? Company is paying only around 600 or 630. What would be the criteria
The compnay has to pay minimum 1800 if your basic pay is above 15000 else they will pay 12% of actual Basic pay
Is is compulsory that the employer must contribute to the employee,s PF amount or its just an option?
It is mandatory
under which rule or act an employee can opt out from contributing PF
It is as per the notification by PF department on Sep 2014.
Can a private employer (MNC) withhold PF of the employee who has been dismissed on frivolous ground and for how long PF can be withheld?
i woud like to know that if a pvt ltd company having only 4 to 5 staff with a salary of Rs: 15000 and 35000/-
whether we have to open PF account please confirm or is there any rule that minimum 10 staff then PF is appalicable
if less than 5 whether we have to register under PF
employee in his previous company is registered under PF. when he left eh organisation he withdraw his PF. now again he joined other company where he didn’t want to deduct the PF. Is it possible as he was earlier an EPF member.
No, it is not possible as he was already a contributing member
What is an employer duty if a employee left the company within two months and employer failed to create UAN due to wrong adhaar no provided by employee. Employer deducted epf n processed the salary. Now what happen to epf contribution of RS 3600 as the ex employee is not contactable.
As for the PF account is not accounted, the contribution deducted from employee salary can be paid back to employer in their FFS.
Is it mandatory for an employer to pay PF arrears for employees who have left the organization? If yes, what if the employees have withdrawn their PF amounts and settled all their dues.
No, it is not required.
Is there any recent amendment as per which EPF contribution for Employer has become 13% of Basic?
NO SUCH AMENDMENTS ARE DONE.
Can an employer reduce the basic salary of employee ? As this will reduce the PF contribution also.
Basic can’t be reduced, has to be as per CTC in the offer letter.
If one employee work for only two month then employer should deposit his share only for two month or till retun ? Please advice on ESi & PF both scenario.
The employer is required to contribute only to the working months of the employee.
my pf and esi was deducted from my salary and but its not reflected in my pf account,what should i do?
can i raise a complaint with pf department?
Yes, you can.
My employer deducted my employee contribution For PF & ESI in my salary. I got msg as Deduction amount for ESI From my ESI Portal only. But not provide to me as UAN number with PF & ESI number then how can I find out my UAN and pf number ? Here HR is not available. Because all dealings managed by Directly employer. Even though I asked about the details also. But not respond. THAT’S WHY AM ASKING AS HOW TO KNOW MY PF & ESI STATUS ?
To know your ESIC details log in to https://www.esic.in/EmployeePortal/login.aspx. The USer id is your IP number on your e-pecan card. To know your UAN-PF details log in to https://bit.ly/38UCs82.
I have a question, I have worked in an organization for 3 and half months.Due to medical care I have resigned. I checked my PF passbook, Employee share is fine,but employer share is stating nil. I asked my employer regarding the issue.He’s claiming according to PF rules an employee gets his employer share if he works above 3 months. Kindly clarify me on this.
That is applicable only for EPS contribution. You are still eligible to receive your Employer EPF contribution. Please check with your employer again.
My employer deducted my employee contribution in my salary. But not provide to me as UAN number with PF number then how can I find out my UAN and pf number ?
Please check with your HR.
Here is one concern with respect to EPF. Initially i have opted to add employee PF to salary instead of Crediting PF account where i was not aware of that employer contribution will not be credited and even pension. Now i wanted to shift from this to crediting into PF account. Is it possible to opt for crediting into PF account. Kindly assist.
Yes, you can start the process
I have a small question can anyone help me out.My question is can an employeer deduct the empoyers contribution to EPF from the salary of the employee.
Sir, the Employer contribution is a part of your CTC but not your gross salary.
I’m know the new PF rules say the employer bears the cost of all past dues not paid (Employer & Employee) in on total wages, but does the employer have the right to tell the employees that they while they must pay in all past dues, the employee must later return to the Employer the full value (less taxes) of both the Employer and Employee past dues that were paid to the PF fund by the employer?
NO. All past dues are payable by Employer only if it is already deducted from the salary of the employee.
When company have open new branch with other state then it will be liable for new EPFO Registration with same state
If you want to maintain state-wise EPFO, then you can register else you can continue with HOME branch EPF.
CAN I FILE NIL EPF (ECR) RETURN AND DO I NEED TO PAY ADMIN CHARGES FOR NIL RETURNS.
Yes, you have to pay the basic admin charges for NIL return too.
Iam on extension after age 60.
Can I ask company to deduct PF only & continue as usual
Yes, you can
EPF Scheme me pravesh ki aayusima kya hoti hai.
When an employee retires, what are the duties of the employer as per EPF and when should it be done.
As soon as the employee exits from the organization, the employer will have to update the same on their monthly return filing. Also, the UAN update of Date of leaving with appropriate reason is a must for the employer.
please clarify pension remittance to PF Organisation with details examples such as gross salary, basic+DA pension remittance step by step EDLI remittance
Sure, we shall come up with an article for the same
this month i have received my Salary arrears but company has been deducted the epf from my salary arrears when the EPF is already paid by company on my salary but they told me that as per the new PF RULES we deducted the epf so please tell me they have right to deducted the balance to my salary arrears.
Yes. They are right.
I’ve taken voluntary retirement from my job since last 1 and half year. My employer is not ready to pay my PF to me. What action needs to be taken?
Please raise a grievance at EPFO.
If empolyer share also deducting from employee salary what punishment in epf .
There is no such punishment as EPF employer share is a part of employee CTC.
If it part of CTC, it has to be paid out in salary and then deducted. Else directly contribute to the PF account rather than showing redundant dual entries in payslip.
I have withdrawn pf from my last working company which is an exempted trust, After withdrawing pf, I realized that I havent not transferred pf from my first company.
, Now I have initiated the pf transfer from My first company but my last working company says they have closed my pf account. I don’t know how to handle this.
Can you please guide me?
If you are currently working, then transfer your PF amount to the current account. If not, withdraw it directly because there is no provision for a backdated account opening.
if employer don’t paid employer contribution than what the punishment, as per our pf act.
Hi Rajesh Kumar,
Interest on the amount not paid for the due period. The penalty in case of prolonged delay
i am a contractor.
i supply workmen to various companies.
all company wants us to deduct pf in different patern, how can we do it in saral?
Please contact our support team for the process.