Overview of EFP Registration
Employee Provident Fund (EPF) is an advantage provided to the employee during the retirement. It is a fund created for the social security and to fulfill the purpose of granting the stability and financial security during retirement. For all the organizations with more than 20 employees it is a compulsory requirement for them to have Employee Provident Fund Registration. It is mandatory for the organizations to follow the respective guidelines and comply with the same.
What is EPF Registration?
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.
EPFO is the largest social security organization with a large volume of financial transactions taking place. EPF is the benefit availed to the employee on their retirement in the form of Provident Fund.
What is the meaning of Employee under the Employee Provident Fund Registration?
According to section 2(f) of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 an employee includes any form of individual who is carrying out any work with the objective to secure some form of wages. This would also include individual who is considered as any worker getting some proportion of the wages either indirectly or directly.
The individuals who are considered as an employee are given below:
- Full-Time Employees
Full-time employees include any individual who has some permanent history of employment with the company. This would be decided on the basis of relationship which is existing between the Company and the worker. The appointment letter can be considered for verifying the employment provision.
- Part-Time Employees
Any employee who is working as a part-time basis for any establishment would be classified as part time employees and be registered under the EPFO. A part-time employee has lesser work hours in comparison with the full-time employee.
- Work From Home Employees
Any employee who is working from home for a fixed time period can also be considered for the employee provident fund registration by the organization.
Contractors are particular individuals appointed for carrying out particular projects according to the requirement of the business. EPF registration is necessary for establishments that recruit contractors.
Consultants are individuals as defined according to their experience. They are giving consulting based services for a fixed time to an establishment and are neither contractor nor any part-time employee.
- Free Lancers
In the recent amendment on the Social Security Code introduced in September 2020, the Government of India has included individuals who are freelancers to be considered under the definition of an employee. The freelancers also can make use of the services given under the employee provident fund registration.
Applicability of EPF Online Registration
EPF registration applies to the following establishments:
- Establishment that is employing 20 or more employees during any time in the previous year
- Factory engaged in any industry having 20 or more employees during 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.
The eligibility criteria are:
- Compulsory Registration
The organization which has more than 20 employees has to mandatory register according to the requirements of EPFO.
- Voluntary Registration
An establishment which has less than 20 employees can choose for voluntarily registration.
- All Establishments
Any form of organization which is acknowledged according to the requirements of the act will have to register under the Employee Provident Fund.
What is the benefit of EPF Registration?
- Employer contributes
The employer contributes some proportion to the EPF fund along with the employee. The employer also adds his contribution that is inclusive of the employee pension scheme (EPS).
- Financial support
Provident fund acts as financial support at the time of retirement, illness, demise, disability or any similar risk occurred to the employee.
- Carry forward
PF account of an employee need not to be closed in case the employee switches his job as the same can be carried forwarded.
- Long term plans
PF funds can be used by the employee for long term plans.
- Reduces Risk
The employee provident fund reduces the significant proportion of risk that would serve advantageous for both the employees and the dependants. This fund will be used during the emergency time and other form of contingency.
- One Account
After the employer goes for the online PF registration and then a number is provided to the employee which shall stay the same even if the employee changes his job. This number will stay valid throughout the India. Therefore, even if the employee switches to a different location for the reason of carrying his employment further, then this number shall stay unchanged.
- Employee Deposit Linked Insurance Scheme (EDLI)
Under this scheme, it provides benefits with respect to insurance to all the employees. The rate of charge is 0.5% to the account. Any member who wants to utilize this scheme will have to specifically sign up for the same.
- Retirement Savings
Taking into consideration that the employee provident fund registration grants extraordinary benefits like it is a mode for retirement savings. After a particular time period, the retirement benefits can be used through this scheme.
Under this scheme, the form of deduction is carried through the salary account. Under the provision of EPF, 12% is deducted and then it is credited to this fund. More than 8.33% from this proportion is credited directly to the requirements of pension. Due to this advantage, an employee can think about such savings as a necessity after their retirement.
EPF Registration UAN (Universal Account Number)
Once the establishment is registered in the EPFO portal, it updates the KYC documentation of its employees by generating a Universal Account Number (UAN). Every employee can use their UAN number to claim PF fund, transfer of PF fund online to the bank account, etc. The only necessary step that an employee has to follow is activate UAN through the following procedure:
- 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 such as UAN, Member Id, Aadhar Number, PAN number, etc
- After that mention your details such as name, address, contact details and complete the form by filling captcha on the screen
- After completing these details, the employee will receive an OTP on his mobile number registered with UAN.
- Employee shall check the box “I Agree” and validate the OTP for activating UAN.
Once the establishment is registered with EPFO, it shall comply with certain mandatory provisions monthly/annually as 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.
Rate of contribution varies depending upon the number of an employee employed in establishment:
- For Establishment Hiring Employees 20 Or Above
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.
What is the online procedure of EPF Registration?
- 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
Once the registration is completed, the department allows the EPF registration certificate in form 5 containing the Unique Identification Number.
- Update KYC Of Every Employee
After the registration is completed and form 5 is allotted, the applicant shall update the KYC of every employee by uploading Aadhar, bank statement and other details for the generation of UAN number of its employee.
- 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.
Documents Required for EPF Registration
Following documents are required for filing employer registration & establishment registration under EPF:
- Name of the employer
- PAN Card of the employer
- Id proof such as driving license/passport/voter-id
- Address proof of registered office such as electricity bill/rent agreement (in case premise is rented)/registry(for owned premise)
- In case the establishment is society, trust, LLP or company, copy of Certificate of Incorporation is needed
- 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
Contribution Rate - EPF
Rate of contribution varies depending upon the number of an employee employed in establishment:
Lately, Finance Minister Nirmala Sitharaman officially announced depletion in statutory EPF contribution of private sector employers and employees from the previous compulsory 12% to 10% for the upcoming 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.
How can Corpbiz help?
- The legal expert of Corpbiz can process for the Registration with the Employee Provident Fund (EPF).
- Liaising with the regulatory authorities like the Employee Provident Fund Organisation (EPFO).
- Filing the Employee Details with the concerned authority.
- Securing the registration number of EPF.
- Legal Advice and other Consultant Services.
Frequently Asked Questions
Yes, out of a total 12% EPF contribution of the employer, 8.33% is deposited to the Employee pension scheme (EPS) that can be withdrawn on the retirement of an employee.
An entity can be registered up to 3authorised signatory by updating its DSC on the EPFO portal. Such DSC is required to be updated to verify the KYC documentation online & for completing the PF claim online.
Out of the total employer’s contribution of 12%, about 8.33% is converted to the Employees' Pension Scheme, where the rest amount of 3.67% is converted into the EDLI account.
The Employees’ Fund Organization or EPFO allots the UAN to the contributory members of EPFO.
Yes, employers can search UAN of other establishments by selecting the ‘search UAN’ option by using the member ID or the UAN.
This scheme is applicable to all companies or business establishments which employ over 20 or more employees.
A retired employee, an employee who is migrating abroad for permanent settlement, apprentice or interns, etc. are excluded from this scheme.
An employer is responsible for depositing all the amount which is deducted from the employees’ salaries as well as they have to pay the employer’s contribution.
Yes, the EPFO being a Governmental Organization comes under the RTI Act.
Currently, any PF withdrawals are credited directly into the beneficiary’s bank account.
No, it is strictly and specifically prohibited under Section 12 of the EPF and MP Act.
In such a case, the contribution is calculated on the basis of the wages paid in a calendar month.
No. an employer cannot join the PF.
The nominee receives the pension in case of the death of the pension member.