Online EPF Registration Process

The work culture today depends on the welfare of employees, with employers scrambling to ensure their employees are entitled to the best care and benefits. An Employee Provident Fund is an initiative designed to offer social security benefits to employees of a particular organisation, building stronger employee-employer bonds. In order to enjoy these benefits to the hilt, employers need to follow a set of rules and guidelines laid out, with registration forming the first step.

Eligibility for registration

Registration is mandatory for companies/organisations which employ more than 20 individuals, including contractual and permanent employees. Smaller organisations which do not have the minimum strength can voluntarily register themselves. Companies which grow to a strength of 20 members are expected to register themselves within one month from the time of attaining this strength, with penalties applicable for delays in registration.

Co-operative societies are expected to register if their employee strength increases to 50 or more and registered organisations continue to be under the purview of the rules and regulations of the Act even if their employee strength falls below the minimum specified number.

EPF registration procedure for employers

An employer can choose to register either offline or online, with the online option being the preferred mode for registration today. The registration form can be downloaded from the website of the Employees’ Provident Fund Organisation. Employers need to provide the following details to successfully register themselves.

Name and address of company
Head office and branch details
Mention date of incorporation/registration of company
Fill up details of employees – total employee strength
Activity the business/enterprise is involved in – i.e. manufacturing, production, service, etc.
Legal details – This pertains to legal status of a company, i.e. whether it is a private firm/public company, partnership or society, etc.
Owner details, including designation and address of Directors and partners
Particulars related to wage component of employees, i.e. total wage disbursed during a month
Details of bank with whom company has banking relationship
PAN details
Basic details of employee (name, date of joining, salary, etc.)

A form titled “Proforma for Coverage” needs to be filled with the details mentioned above to finish the registration process. In addition to this Proforma for Coverage, employers are expected to submit Form 5A with Annexure 1 to complete the formalities.

Documents required

Employers are expected to furnish certain documents as proof in order to successfully register, a list of which are mentioned below.

Copy of partnership deed if the company is a registered partnership firm
A copy of the Certificate of incorporation for a Public or Private Limited Company. This should be issued by the Registrar of Companies
Societies should furnish a copy of their registration certificate
Public and Private Limited Companies need to submit a copy of memorandum and Articles of Association
Societies should furnish a copy of the rules and objects of the society
All legal documents which might be required under the Income Tax Act
PAN details of company
Partition deed
Proof of incorporation – first sales invoice/ license issued by competent authorities
Salary details of employees
Balance sheet details

Know about Break-up of EPF contribution

What is EPF?

Employees’ Provident Fund is the popular investment option availed by the salaried individuals. This is maintained by the Employees’ Provident Fund Organisation of India. Any company over 20 employees is required by law to register with EPFO. This is a retirement benefit scheme that is available to the salaried individuals.

The employees can save a fraction of their salary every month that can be utilised by him/her in the event that he/she is not able to work or on his/her retirement. EPF is a long term investment option that is designed to help the salaried employees after retirement. The fund collected in EPF is through the contribution by the employee and the employer. 12% of the basic salary is contributed by salaried individuals and the other 12% is contributed by the employer. A total of 24% of your salary is contributed each month. This amount is deposited at the Employee Provident Fund Organisation. This contribution creates good corpus and aims to make and individual financially secure after his or her retirement.

Break-up of the EPF contribution

12% of the employee’s salary goes towards the EPF.
Whereas the employer’s contribution is divided as below:
1. 3.67% goes towards contribution for EPF
2. 8.33% goes towards contribution for EPS
3. 0.5% goes towards contribution for EDLI
4. 1.1% goes towards contribution for EPF administration charges
5. 0.01% goes towards contribution for EDLI administration charges

Therefore, the employer contribution is 13.61%. The premium and management charges are borne by the employer and the maximum limit is set at 0.5% of Rs.15,000.

The EPF contribution can be offered at 10% rate, if:

Any establishment that has less than 20 employees.
Any sick unit that has been declared as sick by the Board for Industrial and Financial Reconstruction.
Any establishment that has accumulated losses equal to or exceeding its net worth.
Establishments in jute industry, beedi industry, coir industry and Guar gum factory.

Note:

For EPF:

The contributions are payable on a maximum wage ceiling of Rs.6,500 by both employee and employer.
Employee can pay a higher rate but employer is not under any obligation to pay such higher rates.
In order to pay contribution on higher wages, you are required to submit a joint request from employer and employee. Employer will have to pay administrative charges in higher wages.
If the employee is an international worker, wage ceiling of Rs.6,500 is not applicable.

For EPS:

Here the contribution is made out of the employer’s share of PF. Employee has to make no contributions.
The pension contribution is not to be paid if the employee crosses 58 years of age and is in service. If the EPS pensioner is drawing reduced pension and re-joins as an employee, the pension contribution is at 8.33% that is to be added to the employer share of PF.
In other cases, pension contribution is payable. If a member joins after the age of 50 years, and he or she does not have a choice of not getting the pension contribution as they may not complete 10 years of eligible service. The social security cover is applicable till he or she is a member.
If the employee is an international worker, wage ceiling of Rs.6,500 is not applicable.

For EDLI:

Contribution is to be paid on up to the maximum wage ceiling of Rs.6,500.
EDLI contribution is not payable if the employee crosses 58 years of age. The contribution is paid as long as the member is in service and as long as the PF is being paid.