PF Registration

Employee Provident Fund

The Provident Funds and Other Provisions Act of 1952 governs the Employees Provident Fund, a program for Indian employees. Employees Provident Fund Organization, sometimes known as EPFO, is in charge of overseeing the Employee Provident Fund.

Any business in India that has hired 20 people or more is eligible to apply for PF registration. Sometimes establishments with less than 20 employees are still eligible for PF registration, depending on the circumstances and the exemption. On retirement or resignation, the employee receives a sum that comprises both their own and the employer’s contributions, plus interest.

Who is eligible to register for the EPF?

For Employer

Every establishment must have a PF Registration.

• That has at least 20 persons involved.
• The central government must state this in the announcement on behalf of any such establishment with fewer than 20 employees.

For Employee

Employees must be required to join the EPF if their monthly salary is less than Rs. 15,000. Employees are not required to make any PF payments if their basic wage at the time of joining the company is greater than Rs. 15000 per month, per the norms.

Nonetheless, an employee who earns more than Rs. 15,000 per month can still join and pay contributions to the employer and the Assistant PF commissioner.

The amount for the contribution of PF

In order to avoid penalties, the employer must register the PF within one month of reaching the required strength. Even if the number of employees falls below the necessary threshold, a registered establishment remains subject to the Act’s jurisdiction.

12% of the (Basic Salary + Dearness Allowance + Retention Allowance) must be contributed by the employer. The employee is required to contribute an identical amount. The EPFO regulations stipulate that the contribution rate for both the employer and employees is capped at 10% if the establishment has fewer than 20 employees. The majority of the time, the total contribution is computed on the basic pay for employees who work in the private sector.

The breakup of the PF contribution

• The following subdivisions make up the 12% contribution:
• 67 % of the Employees Provident Fund contribution
• 1% of the payment is allocated to administrative costs for the EPF.
• 5% of the employee’s deposit-linked insurance contribution
• Contribution to the EDLI administration costs of 0.01%
• For the Employee’s Pension Program, 8.33%.

What is the Employees Pension Scheme?

An estimated Rs. 15,000 from the employer’s contribution, or 8.33%, goes into the employee’s Pension Plan. If the person’s basic pay is Rs. 15,000, Rs. 1250 would be channeled to the Employee Pension Plan. 8.33% of the Basic Pay will be routed if it is less than Rs. 15,000, and the remaining amount will be kept in the EPF plan. The company would reserve its portion for credit in the EPF account and give the employee their entire part at superannuation.

Documents Required for Registration

The following documents must be included by the employer with the registration form:

1. PAN of the Partner, Proprietor, or the Director
2. Address proof (can be any utility bill but should not be older than 2 months)
3. Aadhar card of Proprietor, Partner, or Director.
4. Canceled Cheque Or Bank Statement
5. Digital Signature of the Proprietor/ Partner or Director.
6. Hired/ Rented or Leased Agreement If there is any.

EPF charges

• For the employee share, pension contribution, and EDLI contribution, the amount is rounded to the closest rupee for each employee.
• The employee share and the pension contribution are subtracted to get the employer share.
• A minimum of Rs. 500 is required to be paid each month as part of the EPF administrative costs payment amount.
• The lowest administrative fee that would be charged if the establishment has no members during the month is Rs. 75.
• A minimum payment of Rs. 200 is required for the monthly payment amount under the EDLI administrative charges, which is rounded to the nearest rupee.
• If there are no members at the institution during the month, a minimum administrative fee of Rs. 25 is due.
• If the establishment is exempt from the PF system, the admin fees would be replaced by inspection fees of 0.18% (minimum Rs 5).
• if the establishment qualifies for the EDLI plan exemption. The minimum inspection fee is one rupee at a rate of 0.005%, which must be paid in lieu of the administrative fees.

Due date

The employer must take the employee’s contribution from his salary before paying the employee’s salary. The employer’s share and the employee’s half will then both be due to the EPFO within 15 days of the end of each month.

In terms of returns from a debt instrument, the EPF stands out. The money is backed by a sovereign, and the interest is tax-free. Since contributions are tax-deductible from income, the PF has EEE (exempt, exempt, exempt) status. It’s rare to find debt instruments that offer such high yields while also being safe and reliable. So, it is preferable to move the PF account while changing jobs in order to reduce the temptation to withdraw funds.

PF Registration FAQ’s

1. Where I can register a PF account?

PF registration has to be done with EPFO. The PF registration can be done online on the website.

2. Who is eligible to get PF Registration?

For a salaried employee if the Basic and Dearness allowance is less than Rs.15,000 per month then it is mandatory to get the EPF registration by the employer.

3. What is the basic limit for PF registration?

Employees that draw less than Rs.15,000 per month need to get EPF registration mandatorily, and the employee drawing the Pay above the prescribed limit needs to get permission from the assistant PF commissioner to become a member.

4. Is PF registration mandatory?

PF registration is mandatory for all establishments with 20 or more persons, if the establishment has fewer than20 employees still a PF registration would be required. The employee can become eligible for PF right from the commencement of the employment and onus of deduction and PF payment is with the employer.

5. How long does it take to obtain PF registration?

It requires 20-25 days to obtain PF registration in India.

6. Is PF registration mandatory for a Private Limited Company?

Not every Private Limited Company is required to obtain PF registration.

7. What if the employee doesn’t have PF?

If the employee does not want PF registration he can fill the Form 11 at the time of joining the job. The employee can also submit a letter addressing the employer stating that he wishes to opt out of the Provident Fund Scheme.

8. Which PAN is to be entered to obtain PF registration?

The PAN issued in the name of the business entity is to be used for PF registration.

9. Is it necessary to be present physically to obtain PF registration?

No, with SalahKaro you can complete the whole procedure online, all you need to do to submit is the documents required.

10. How is the PF registration process helpful in pension?

The PF is directly related to the employee’s pension. Apart from the employee’s contribution which is 12% towards the EPF, an equal amount is contributed by the employer, and 8.33% of this goes towards the Employee Pension Scheme.

Documents Required for Registration

The following documents must be included by the employer with the registration form:

1. PAN of the Partner, Proprietor, or the Director
2. Address proof (can be any utility bill but should not be older than 2 months)
3. Aadhar card of Proprietor, Partner, or Director.
4. Canceled Cheque Or Bank Statement
5. Digital Signature of the Proprietor/ Partner or Director.
6. Hired/ Rented or Leased Agreement If there is any.