Employees’ Provident Fund is a scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952.
As per the Act, both the employer and employee shall contribute 12% of the employee’s basic salary and dearness allowance towards the EPF.
EPF can essentially be used to avail a loan or be withdrawn post-retirement.
Employees’ Provident Fund (EPF) Schemes
The EPF scheme gains its power through three Acts -
- Employees’ Provident Fund Scheme, 1952
EPF is the main scheme under the Act and is managed by the Employees’ Provident Fund Organization. Barring certain exceptions, it covers all establishments that employ 20 or more people.
- Employees’ Pension Scheme, 1995
EPF Pension, or popularly known as Employees' Pension Scheme, makes provisions for employees' pension after the age of 58 years. Depending upon the pensionable salary and service, the money can be withdrawn after the specified term.
- Employees’ Deposit Linked Insurance Scheme, 1976
The EDLI was formed by the Employees' Provident Fund Organization to guarantee insurance cover to the employees. Organizations covered under EPF get registered automatically under EDLI. A sum of up to ₹ 6 lakhs is assured under the scheme.
- Salaried employees with less than ₹ 15,000 income per month are covered
- Compulsory for organizations if they have 20 or more employees on the payroll
- Organizations with less than 20 employees can join voluntarily
- Employees who earn more than ₹ 15,000 can also register, taking approval from their employer and Assistant PF Commissioner
Except for the states of Jammu and Kashmir, the whole country is subject to the EPF provisions.
How to Register on EPF
EPFO allows for online employer registration. You can follow the given steps to set up an account –
- Visit the EPFO Portal
- Click on ‘Establishment Registration’
- Read the user manual very carefully
- Go for the ‘Sign Up’ button, fill in all the required information and click on ‘Sign Up’
- There will be an option called ‘Registration For EPFO-ESIC'
- Apply for a ‘New Registration’ on the next page and check the boxes for ‘Employees’ State Insurance Act, 1948’ and ‘Employees’ Provident Fund and Miscellaneous Provision Act, 1952’ before clicking the ‘Submit’ button
- A red asterisk shall mark all the details required
- Fill in the details and submit the form
- Sign the form with the employer’s DSC (Digital Signature Certificate)
- On completion, you’ll receive a confirmation mail from Shram Suvidha
How to Login in EPF
Following are the steps to log into your EPF account –
- Go to EPFO website
- Next, select 'Our Services' and click on 'For Employees'
- Click on 'Member UAN/Online Service (OCS/OTCP)' under ‘Services’
- Enter the UAN and password along with the CAPTCHA details
- Click on ‘Sign In’
- Now you can manage your EPF account
- Visit the EPFO Employer Login Page
- Enter the Username and Password
- Click on ‘Sign In’
- You’ll be able to see the main page of the Employer’s Portal
EPF KYC Update
Here are the steps to update your KYC –
- Log into the EPFO member’s portal
- Go to ‘Manage’ from the top bar and select the KYC option there
- You’ll be directed to a page with Document Type and their respective fields
- Check the boxes next to the documents you are updating
- Click the ‘Save’ option once you’re done
- Your KYC documents will show under the ‘KYC Pending for Approval’ column
- After your employer approves, they will be displayed under Digitally Approved KYC
- It helps secure your future retirement with the savings scheme
- Monthly deductions avoid any massive outflow from your salary
- It offers a fixed interest rate for capital appreciation
- It provides tax benefit under Section 80C of the Income Tax Act
- In case of unemployment, you can withdraw up to 75% of the corpus
- It keeps you ready for other financial emergencies with easy withdrawal option
Types of EPF Forms
- Form 2: For nominating and declaring
- Form 5: For registration
- Form 5 IF: For claims under EDLI
- Form 10C: For withdrawal benefits and scheme certification
- Form 10D: For monthly pension
- Form 11: For transfer of EPF account
- Form 14: For buying an LIC policy
- Form 15G: For tax benefits on interest
- Form 19: For settling EPF
- Form 20: For settling EPF in case of member’s demise
- Form 31: For withdrawals, advances, and loans
Both the employer and the employee contribute 12% of the basic salary and dearness allowance.
Under certain circumstances like employee count equal to or less than 20, losses more than or equal to net worth, organizations deemed sick1, and others, the employee’s contribution cuts down to 10%.
While the employee's entire contribution goes towards the EPF scheme, the employer's share is distributed between the three schemes and some admin charges.
If the employee’s salary is ₹ 14000
The contribution would be –
Employer: 12% of 14000 = ₹ 1680
Employee: 12% of 14000 = ₹ 1680
Total: ₹ 3360
EPF Payment (Steps)
EPF can be paid by the employer via the EPFO site or directly through a bank the organization has tied up with. To pay via the EPFO site, the steps are –
- Log in to the EPFO portal with your Electronic Challan cum Return credentials
- Check whether the details like establishment ID, name, address, exemption status, etc. are correct
- Go to 'Payment' from the dropdown list and select 'ECR Upload'
- Select ‘Wage Month’, ‘Salary Disbursal Rate’, ‘Rate of Contribution’, and upload the ECR file
- Next, the uploaded ECR file will then get validated
- If all the requisites are met, a screen displaying the message ‘File Validation Successful’ will appear
- Otherwise, an error will come up, asking you to correct the ECR text file in the specified format and upload it again after making the required corrections
- The generated TRRN will appear; select 'Verify' to confirm the details
- Click on 'Prepare Challan' option and generate the ECR summary sheet
- Enter the admin charges and select ‘Generate Challan’
- Verify the challan amount, and click 'Finalize'
- Pay against the relevant TRRN
- Choose the online payment mode and select your bank
- Make the payment through net banking
- Transaction ID and e-payment slip shall be generated on successful payment
- The updated transaction status will then be shown on the EPFO page, and you will receive a confirmation of the payment made
EPF passbook contains all contributions made by the employee and the employer in EPF and EPS accounts. The contributions and any interest deposited reflect in the passbook. This service enables you to keep a real-time track of the deposits and withdrawals as well.
EPF Balance Check (Steps)
A member can check their EPF balance in four ways –
- By logging on to the EPFO portal and checking your EPF Passbook
- By sending an SMS to 7738299899 as EPFOHO UAN ENG, changing the last three characters depending upon the language they require the information in
- By giving a missed call to 011-22901406 from your EPFO registered mobile number
- The Umang or EPFO app allows you to log into the member section using your UAN and registered mobile number to check the EPF Passbook
Therefore, EPF acts as social security for all employees of the organized sector. It forms an integral part of your investments without burning a hole in your pocket.
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1A sick industrial company based on the definition, provided in the Clause (0) of Sub-Section (1) of Section 3, which is a part of the sick industrial companies under the 1985 Act. They also need to be declared the same, by the Board for Industrial and Financial Reconstruction.