Overview

EPF stands for Employee Provident Fund, a scheme governed and regulated by a body named Employee’s Provident Fund Organization (EPFO) constituted under Employee’s Provident Funds & Miscellaneous Provisions, Act 1952.

The EPFO ​​is the largest social security organization, with large amounts of financial transactions. EPF is the benefit of an employee upon his retirement as a provident fund.

Applicability

EPF registration applies to the following establishments:

• To employ 20 or more employees at any time in the previous year
• Factories engaged in any industry with 20 or more employees at any time of the year.
• Central Government, after giving two months’ notice to the certain establishment for compulsory registration irrespective of their employees. Such an establishment shall get themselves registered immediately upon the receipt of the notice.

Benefits

• The employer contributes some proportion of the employee to the EPF fund. The employer also adds its contribution which is included in the Employee Pension Scheme (EPS)
• Provident fund acts as financial aid at the time of retirement, illness, death, disability or any kind of risk to the employee.
• There is no need to close the PF account of the employee in case the employee leaves the job as it can be carried forward.
  >
• PF funds can be used by the employee for long term plans.

EPF Registration UAN (Universal Account Number)

Once registered in the EPFO ​​portal, it updates the KYC documents of its employees by creating a Universal Account Number (UAN). Every employee can use their UAN number to claim PF funds, online transfer of PF funds to a bank account, etc. The only necessary step that the employee has to activate the UAN through the following process:

• An employee can visit online for its UAN activation on the official website of EPFO https://unifiedportal-mem.epfindia.gov.in/memberinterface/
• Complete the details like UAN, member number, Aadhaar number, PAN number, etc.
• Then mention your details like name, address, contact details and complete the form by filling the captcha on the screen
• After completing these details, the employee will receive the OTP on their mobile number registered with the UAN.
• Employee shall check the box “I Agree” and validate the OTP for activating UAN.

Required Documents

Following documents are required for filing employer registration & establishment registration under EPF:

• Employer Name
• Employer's Li PAN Card
• ID proof like driving license / passport / voter-id
• Address proof of registered office such as electricity bill / rent agreement (if the case is on rent) / registry (for proprietary basis)
• If the institution is a society, trust, LLP or company, a copy of the certificate of incorporation is required
• Partnership deed, id proof & address proof of every partner if the establishment is partnership firm
• MOA & AOA if the applicant is a private or public company
• Details of employees for allotment of UAN number:
• Aadhar card
• Pan card
• Bank account details such as account number & IFSC Code
• Contact number & email id
• Date of birth as per Aadhar
• Designation of employees

Subscription Rates

The rate of contribution varies depending on the number of employees employed in the establishment:

Recently, Finance Minister Nirmala Sitharaman officially announced a reduction in the statutory EPF contribution of private sector employers and employees from the previous mandatory 12% to 10% for the next three months. Government’s goal is to give relief against pandemic, coronavirus. In case of government PSUs the contribution of employers will remain at 12% while PSU employees can pay 10%.

Reduction in the employee’s contribution from 12 % to 10% offers a plus point. It helps in increasing the take home pay or the cash-in-hand of the employee.

Mandatory compliance

Once registered with EPFO, it will follow certain mandatory provisions of the monthly / yearly prescribed under the Act:

• Monthly return is filed online through the establishment login by uploading the ECR sheet.
• Return is filed online with the 15th of succeeding month
• ECR sheet can be downloaded through EPFO in the XML sheet that contains name & UAN of every employee registered with the establishment during the month for which return is filed.
• XML sheet shall be converted into a Comma-dilemma file for uploading the same for return filing.
• Complete the return filing by contributing online payment gateways.

Contribution rate

The rate of contribution varies depending on the number of employees employed in the establishment:

• 20 or later to hire employees

  Employer and employee of such establishment shall contribute up to 12% of the employee’s salary (Basic wages + Dearness allowances)

• For establishment hiring less than 20 employees:

  Following establishment that shall contribute at the rate of 10% of basic wages of the employee in spite of 12%.

• An establishment having up to 10 employees and get voluntary registration under EPFO.
• Any establishment incurred loss during the previous year
• Other establishments such as Brick Factory, Jute Factory, Beedi making factory, etc.

Registration Procedure

• Employer Registration

  Apply online on the official website of EPFO https://www.epfindia.gov.in/ by selecting the option of “Establishment Registration”. Complete the details of employers such as the name of the establishment, address of the establishments, details of owner/employer, PAN of the employer, etc.

• Verification through OTP

  Once the online form is completed & upon submitting the form online, the applicant will receive OTP Pin on his registered email id and mobile number, which shall be verified to activate establishment login.

• Establishment Login

  Once the employer registration is completed and verified, the applicant can log in with the credentials for completing the details of the Establishment. DSC Registration: After the registration of the establishment is completed, the applicant needs to register the DSC online by Selecting the "DSC/E-Sign" option from the drop-down menu. DSC is registered for authorized signatory on behalf of such establishment.

• Registration Certificate

  After the registration is complete, the department allows an EPF registration certificate with a unique identification number in Form 5.

• Update every employee's KYC

  After the registration is completed and Form 5 is allotted, the applicant will update the KYC of every employee by uploading Aadhaar, bank statement and other details for generation of their employee's UAN number.

• Common Registration

  Entities willing to get themselves registered under EPF & ESI both, can now through common registration facility available under which entity can get the EPF Code number and ESI Code number by filling the single application.