Overview of EPF Registration

The Employee Provident Fund (EPF) is a government-backed retirement benefit scheme designed for salaried employees in both the public and private sectors. The scheme is applicable to employees from a broad range of occupations, including professionals, security guards, housekeeping staff, and more. However, it does not cover apprentices, interns, or migrating employees. EPF registration is managed and overseen by the Employee Provident Fund Organization (EPFO).

Any company or organization with 20 or more employees is required to register under the EPF scheme. While businesses with fewer than 20 employees are not mandatorily required to register, they can choose to voluntarily participate. For Cooperative Societies, the requirement is set at 50 or more employees. Companies must complete their EPF registration within one month of hiring their 20th employee to avoid penalties.

The Employees Provident Fund and Miscellaneous Provisions Act, 1952 governs EPF registration, mandating both employers and employees to contribute 12% of the employee’s basic wage to the EPF account. One of the notable advantages of the EPF is that the EPF account number remains the same, even if the employee changes jobs.

What is Employee Provident Fund (EPF)?

The Employee Provident Fund (EPF) is a government-established savings scheme under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. The primary purpose of the EPF is to provide employees with a retirement fund, ensuring financial security post-retirement. The scheme aims to foster a healthy employer-employee relationship and is mandatory for any organization with more than 20 employees.

What is the Employee Provident Fund Organization (EPFO)?

The Employee Provident Fund Organization (EPFO) is the governing body responsible for administering the EPF scheme. It is one of the largest social security organizations in India, handling a vast number of financial transactions daily. According to the 2016-2017 annual report, EPFO manages approximately 19.34 crore accounts of its members. All regulations and guidelines related to the EPF scheme are formulated and enforced by the EPFO.

Benefits of Online EPF Registration

Here are the key advantages of registering for the Employee Provident Fund (EPF) online:

1. Risk Coverage

The EPF scheme offers protection against unforeseen circumstances such as retirement, illness, or death. This ensures that both employees and their dependents are financially safeguarded.

2. Uniform Account

One of the major benefits of the EPF account is that it is transferable and continual. Employees can carry their EPF account forward when they switch jobs, ensuring uninterrupted savings without the need for a new account at every workplace.

3. EDLI Scheme (Employee Deposit Linked Insurance Scheme)

The EDLI scheme provides life insurance coverage to employees who contribute to the EPF. A 0.5% deduction from the employee's salary is made to provide insurance coverage under this scheme, offering financial protection in case of death.

4. Helps Achieve Long-Term Goals

The savings accumulated in the EPF account can be used for important life events, such as marriage, higher education, or any emergency requiring quick access to funds. This makes EPF an important financial tool for long-term planning.

5. Pension Scheme

Both the employee and the employer contribute to the EPF. Specifically, the employer contributes 12% of the employee's monthly salary, out of which 8.33% is directed to the Employee Pension Scheme (EPS). This ensures that employees have a pension fund available for their post-retirement needs.

Who is Considered an Employee Under the EPF Scheme?

Eligible Employees:

• Full-time Employees
• Part-time Employees
• Home-based Employees
• Contract Employees
• Full-time Consultants

Not Covered Under EPF:

• Retired Employees
• Employees permanently settling abroad
• Apprentices
• Interns

Who is Eligible for EPF Registration?

The following entities are eligible to obtain EPF Registration:

1. Establishments employing more than 20 employees at any point during the previous financial year.
2. Factories, regardless of the industry, employing more than 20 employees during the previous financial year.
3. The Central Government can mandate any establishment to register under the EPF scheme, irrespective of the employee count. However, this can only be done after providing two months' notice to the concerned establishment, after which immediate registration is required.

Who is Exempted from EPF Registration?

Entities with less than 20 employees are exempt from mandatory EPF registration. However, such companies can still voluntarily register under the EPF scheme, which would then be termed Voluntary EPF Registration.

Contribution Rate for EPF Scheme

For Establishments Employing More Than 20 Employees:

• Employer’s Contribution: 12% of the employee’s basic salary + Dearness Allowance (DA).
• Employee’s Contribution: 12% of the employee’s basic salary.

For Establishments Employing Less Than 20 Employees:

• The contribution rate for both the employer and employee is 10% of the employee’s basic salary + Dearness Allowance (DA). This applies to:
  • Sick Industrial Companies (as recognized by the BIFR).
  • Companies with accumulated losses equal to their net worth.
  • Establishments in industries such as:
    • Jute
    • Beedi
    • Brick
    • Coir
    • Guar Gum Factories

Documents Required for EPF Registration

To apply for EPF Registration, the following documents are required:

1. Employer Details:

   • Name of the Employer.
   • PAN Card details of the Employer.
   • ID Proof of the Employer (Passport/Driving License/Voter ID).
   • Address Proof of the Registered Office (Sale Deed or Rent Agreement/Lease Deed).

2. Utility Bills:

   • Recent Electricity Bill, Water Tax Receipt, or similar documents (not older than two months).

3. Additional Documents for Different Entities:

   • Certificate of Registration (for Trust, Society, LLP, or Company).
   • Partnership Deed (for Partnership Firm).
   • Cancelled cheque with pre-printed Account Holder’s Name and Account Number.

4. Company Documents (for Private or Public Limited Companies):

   • Memorandum of Association (MOA) and Articles of Association (AOA).

5. Employee Details for UAN (Universal Account Number) allotment:

   • Aadhar Card
   • PAN Card
   • Bank Account Details (Account Number, IFSC Code)
   • Contact Information (Phone Number and Email)
   • Date of Birth (as per Aadhar)
   • Employee’s Designation

6. Financial Documents:

   • Balance Sheet of the company.
   • First Sale Bill issued by the company.

7. Employee Wage Details:

   • Information on the total wages paid to employees in a month.

Procedure for EPF Registration

Here are the steps involved in the procedure for obtaining Online EPF Registration:

1. The employee needs to visit the official EPFO portal to activate their UAN (Universal Account Number).

2. The employee must fill in the required details, including the UAN, Member ID, PAN Card, Aadhar Number, and other relevant information.

3. In the next step, the employee is asked to provide additional personal details such as Name, Contact Number, and Address.

4. The employee should then complete the form by entering the CAPTCHA displayed on the screen.

5. After submitting the form, the employee will receive an OTP (One-Time Password) on their registered mobile number associated with the UAN.

6. Finally, the employee must check the box agreeing to the terms and authenticate the OTP to complete the UAN activation process.

This concludes the process for registering and activating the UAN for online EPF registration.

Rate of Interest on EPF Deposits

As of the financial year 2019-2020, the Employee Provident Fund Organization (EPFO) has revised the rate of interest on EPF deposits. The interest rate has been reduced from 8.65% to 8.50%.

What is a Universal Account Number (UAN)?

The Universal Account Number (UAN) is a unique 12-digit number issued to every employee by the EPFO during registration. To obtain a UAN, an employee must provide details like Name, PAN, Father’s Name, Aadhaar number, and Date of Birth.

Key benefits of UAN:

• Portability: The same UAN remains valid throughout an employee’s career, even if they change jobs.
• Autonomy: UAN empowers employees to manage their EPF accounts directly, reducing reliance on employers for account-related tasks.

Penalty for Employer’s Delay in EPF Payment

If an employer fails to make the EPF payment on time, a penalty is imposed on the delayed payment. Below is a table outlining the penalty rates based on the period of delay:

These penalty rates ensure that employers comply with the EPF payment deadlines and contribute to the employee’s provident fund on time.