EPF Rules for Employer 2018-19: Registration and Contribution

EPF Rules for Employer 2018-19: Registration and Contribution

EPF or Provident Fund is a social security scheme of the government. It ensures a retirement saving for the employees who don’t have any pension scheme. This scheme runs through the employers. These employers can be a private company or any organisation. Besides this, the government has made certain rules of this scheme. The employer and employee both have to follow the PF rules. In this post, I would discuss the PF rules for the employer. These rules are updated till 2018.

PF Rules for the Employer

The EPF scheme is governed by the EPF Act- 1952. Thus, it is a law and an employee and employer have to abide by it.


Registration Mandatory

A company or organisation has to participate in EPF scheme if the total number of the employee is 20 or more. Employers with less than 20 employees can also take part in this scheme. To participate in the scheme, it has to register with the EPFO. This process is free and online. An employer can visit the Shram Suvidha portal for EPF registration. The PAN is mandatory for the registration.

Mandatory EPF Membership

It is mandatory to enrol every employee into the EPF scheme unless the salary of the employee is more than ₹15,000/month. However, the scheme is open to all irrespective of the salary. Also once an employee has been the member of EPF scheme, it has to again enrol in new employment what if the salary is more than ₹15,000/month.

A new employee who has a salary of more than ₹15,000/month can opt out of the EPF scheme. The employer should not insist on that case. The participation in Employee Pension Scheme is also voluntary if the salary is more than the given limit.

Monthly Deductions

The employer has to deduct the 12% EPF contribution from the employees’ salary before the disbursal. This deduction should be mentioned in the salary slip. Along with this amount, the employer has to also contribute the similar amount.

In practice, many companies deduct both the amount from the CTC salary of the employee. In other words, the CTC salary (Cost to Company) includes the EPF contribution by the employer as well.

EPF Contribution Rate for Employer and Employee

The government has fixed 12% of the basic salary as the contribution rate of the EPF scheme. The employee and employer both have to deposit 12% of the monthly basic salary. Thus, total 24% goes to the retirement saving.

You should know that Employee pension scheme is also funded from this contribution. Out of the 12% employer’s contribution, 8.33% goes towards the pension scheme. This amount is capped at Rs 1250. The remaining amount goes to the EPF scheme.

The employer has to also contribute to the EDLI scheme and administrative expenses. It is above and over of the 12% contribution.

EPF contribution Rate

What Forms the Salary

For the calculation of EPF scheme, the basic salary is considered. This also includes the DA (dearness allowance). All other allowances and perks are not considered for the calculation of EPF contribution. If an employee also gets a commission as a percentage of sales, this amount would be also added with basic salary for the PF calculation.

Regular Tasks of the Employers

An employer who becomes a part of the EPF scheme has to perform some regular tasks. Off course these tasks are a burden on small companies but it is mandatory by the law. Even companies have to pay to EPFO for the administrative expenses. However, because of the UAN and online portals, the EPF related task has come down.

On the other hand, an employer can also create its own trust to manage the EPF contribution. The EPFO gives this exemption after the verification. In this case, an employer is not required to remit EPF contribution. Rather the money would go to the private trust. However, the trust should give equal or higher return than the EPFO.

PF Remittance

An employer has to remit the EPF contribution to the EPFO. The remittance should be done every month. The employer has to remit EPF contribution within 15 days of the next month. The EPF contribution from the salary of October month should be deposited to EPFO account up to 15th November. If you miss the deadline, the EPFO would put the company in the defaulter list. The employer would have to also pay penal interest for the default period.

EPF Remittance Return

An employee has to file a return of its monthly remittance. In this return, the employer has to give details of the employees, their salary and contribution. On the basis of this return, the EPFO updates the passbook of the very employee. This return is tallied with the aggregate remittance of the EPF amount. The employer has to also file an annual return.

The fill the monthly return the employer has to login to the UAN employer portal and fill the ECR. Read the instructions before filing the return.

PF member Registration

The employer has to also enrol every new employee into the EPF scheme. Form 11 is used for the registration. But, this form is not submitted to the EPF office. Rather, the employer has to keep with itself and use it to fill the online form.

Generation of UAN

The employer has to also generate the UAN for a new employee who has not an existing UAN. This task is done online and hasslefree. To generate a new UAN the employer has to login UAN employer portal.

KYC Upload

An Approved KYC is mandatory for the EPF withdrawal. The EPFO requires 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. Many older employees may not have given the KYC details.

Today KYC details are mandatory to furnish at the time of registration of a new member.

If an EPF member of a company uploads his/her KYC details online, it is the duty of the employer to approve it. The employer has to verify the details before the approval.

Forwarding Offline Application

Although today most of the EPF transfer and PF withdrawal is done online. But, still, there would be cases when an employer has to forward the physical application of PF transfer and withdrawal. It is the duty of the employer to attest the application and forward it to the regional PF office.

Rectification of Personal Details

Before the linking of the UAN with the Aadhaar, there used to be many errors in the personal details of members. The wrong spellings, Wrong Date of birth were very common. Such mistakes can be fixed only through the employer. As it is the employer who verifies the authenticity of the employee. Hence,  the application for the rectification in personal details goes through the employer.

Well, if a member uses the Aadhaar for rectification then online approval by the employer would do the rectification. A member can apply for the rectification of personal detailsthrough the UAN member portal.

Disbursal of UAN number and EPF ID

It is the duty of the employer to tell the UAN and EPF member ID to its employee. In fact, It is better to print these details in the salary slip. The employer has to also persuade its employee to activate their UAN so that they can do EPF related tasks online.

In this post, I have told the EPF scheme rules for the employers. I have also discussed the general tasks of the employers. Do you also have something to add? Use the comments box.


Source:- planmoneytax