PF Registration

As per the EPF rules, employee whose ‘pay’ is more than Rs. 15,000 per month, is not eligible and is called ‘Excluded Employee’. Employee who is drawing a salary less than Rs. 15,000 per month has to compulsorily become member of EPF scheme. However, an excluded employee i.e. one who is drawing a salary above Rs. 15,000 can also become a member with permission of Assistant PF Commissioner, if he and his employer agrees.

The following are not covered as employee for the purpose of EPF:-

• Proprietor/partner/director/trustee
• Contractor not having an employer employee relationship
• Person employed on contract for professional services such as CA/CS/Advocate etc.
• An apprentice engaged under the Apprentice Act, 1961

Rate of contribution for establishment having 20 or more employees:

• Employer’s contribution- 12% of employees’ basic salary + dearness allowance
• Employees’ contribution- 12% of employees’ basic salary + dearness allowance

Rate of contribution for establishment having less than 20 employees:

The following establishments have to contribute @10% of basic salary + dearness allowance:

• Any establishment having less than 20 employees
• Any sick industrial unit as declared by the Board for Industrial & Financial Reconstruction (BIFR)
•  Any establishment which has at the end of any financial year, accumulated losses equal to or exceeding its entire net worth and
• Any establishment in the following industries- (a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar Gum factories

• Employees’ contribution of 12% entirely goes towards EPF Scheme
• Out of 12% contribution of employer, 8.33% is diverted to Employees’ Pension Scheme subject to maximum of Rs. 1250 and the balance is retained in EPF scheme
• The employer is required to pay additional 0.5% of salary towards EDLI scheme for employees and 0.5% towards administration charges

Yes, the employee can voluntarily make higher contribution above 12% of salary. This is called contribution towards Voluntary Provident Fund (VPF) which is accounted for separately. This VPF also earns tax free interest. However, the employer does not have to match such voluntary contribution.

For F.Y. 2019-20, the interest rate is 8.50% However, this rate is still lucrative as compared to interest rate on fixed deposits and debt instruments. Further, a PF account comes within the Exempt, Exempt, Exempt (EEE) status. You need not pay tax on the amount saved in your PF account at any point of time.

Once you are registered with EPF, the compliances laid down under the law are to be made irrespective of the fact that the number of employees has fallen below 20.

Registration under EPF cannot be cancelled until and unless the entity wounded up and closed down. PF Commissioner may consider special cases where employer undertake that there is no employee left and in future, no employee will be hired. After the presentation of all documents to the satisfaction of the commissioner, cancellation may be granted.

UAN stands for a 12 digit Universal Account Number, which is allotted to each employee at the time of registering on the EPFO Portal. It is unique for every employee and remains the same throughout his tenure of employment, whether he changes his job or establishment.

• Contribution towards PF to be deposited on or before 15th of every month
• Monthly PF Return to be filed by 15th of each month