Employees Provident Fund (EPF) is a scheme governed by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It is controlled under the Employees' Provident Fund Organisation (EPFO).
All salaried people come under a retirement benefit scheme which is called Employees Provident Fund. This scheme is managed by Employees Provident Fund Organization of India (EPFO). Any company that includes 20 employees or more is needed to complete registration with EPFO.
It is compulsory that employees' drawing must be less than Rs 15,000 per month, to become members of the Employee's Provident Fund (EPF). According to the guidelines in Employee's Provident Fund, employee, whose 'basic pay' exceeds Rs. 15,000 per month, at the time of joining, is not needed to contribute to Provident Fund. However, an employee who is drawing a payment exceeds Rs 15,000 can still become a member and make contributions to provident fund, with the approval of the Employer and Assistant Provident Fund Commissioner.
The contribution to Provident Fund paid by the employer is 12% of (basic salary + dearness allowance + retaining allowance). The employee requires paying an equal contribution. In the case of business that includes less than 20 employees or meets certain other criteria, according to the EPFO rules, the contribution rate for both employee and the employer is restricted to 10%. For most employees working in the private sector, it's the basic salary on which the contribution is computed.
Out of employers' contribution, 8.33% will be sent to Employees' Pension Scheme, which is calculated on Rs 15,000. The amount sent to EPS would be Rs. 1250 for employees whose basic pay amounts to Rs 15,000 or more. Though, if the basic pay is less than Rs 15000, then 8.33% of such amount would be sent to EPS, the balance will be sustained in the EPF scheme. On superannuation, the employee would obtain the complete share plus the balance of employer's share reserved for his credit in EPF account.
We arrive @ 12% based on the following sub-division :
3.67% of contribution to Employees' Provident Fund
1.1% of contribution to EPF Administration Charges
0.5% of contribution to Employees' Deposit Linked Insurance
0.01% of contribution to EDLI Administration Charges
8.33% of contribution to Employees' Pension Scheme
Contribution is sent to the nearest rupee for every employee, for the employee share, pension contribution and EDLI contribution.
The Employer Share is the difference between employee Share (payable as statute) and Pension Contribution.
Monthly payable amount likely to EPF Administrative charges is sent to the nearest rupee and a minimum of Rs. 500 is to be paid.
If the business has no member in the month, the minimum administrative charge will be Rs. 75
Monthly payable amount under EDLI Administrative charges is rounded to the nearest rupee and at least Rs. 200 is to be paid.
If the business does not have member in the month, the minimum administrative charge will be Rs. 25
If establishment is exempted from PF Scheme, Inspection charges @0.18%, minimum Rs. 5/- is to be paid in place of Admin charges.
If the Establishment is exempted under EDLI Scheme, Inspection charges @ 0.005%, minimum Re 1 is to be paid in place of Admin charges.
Before paying the employees' salary, the employer must deduct the employee's contribution from his wages. Then both the part of employee and employer contributions are payable to the EPFO, within 15 days since the end of every month.
Depending on the type of the unit looking for PF registration, the documents required for PF registration would be as under :
For Proprietorships
PAN card of owner
Name of the applicant
Address proof of proprietor
Address proof for the business premises
Id proof of the proprietor like Voter ID Card /Driving license/Passport
Entire details of the applicant with their residential address and telephone number
For Partnership Firms / LLP / Company
Name of the Company or partnership firm or LLP
Partnership deed in the case of partnership firms or LLP
Certificate of Registration Firms in the case of Partnership firm or Incorporation Certificate in the case of LLP or Company
Id proof of Partners – Voter ID Card / Pan Card / Passport / Driving license in the case of Partnership Firm or LLP, ID proof of Directors in the case of company
List of all partners with address proof or telephone number of all partners in the case of Partnership Firm or LLP, List of all Directors with contact details in the case of Company
Society/Trust
Certificate of incorporation of society/trust
In the case of society, trust and others, registration of the organization requires to be completed with associated authority.
ID proof of President and complete members of society
Memorandum of Association and Bye Laws of society and trust
Entire details of President and all members with their telephone number and complete address
Pan card of society/trust
Common Documents needed for all units
First sale bill
First purchase bill of raw material and machinery
Name and address of the bank
GST registration certificate, if registered under GST
Record of a monthly strength of the number of employees
Register of all vouchers, salary and wages, all balance sheets from day one to current date of provisional coverage
Date of joining of employees, date of birth and fathers name
Salary and PF Statement
Cross cancelled cheque
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