Employee Provident Fund (EPF) — Registration, Contributions, Withdrawal and Legal Compliance

The EPF Act applies to establishments with 20 or more employees. However, establishments with fewer than 20 employees can voluntarily register. Certain industries are covered irrespective of the number of employees.

Registration must be completed within the prescribed time. The employer must submit Form 5A with establishment details, along with employee details. Each employee must fill Form 11 (declaration of previous EPF membership).

At Advocate in Asansol, we help businesses complete EPF registration, ensure proper compliance, and handle inspections.

Employee Contribution: 12% of basic wages + dearness allowance + retaining allowance (if any). The employee can voluntarily contribute more under the VPF scheme.

Employer Contribution: 12% of wages. Of this, 3.67% goes to EPF, 8.33% to EPS (subject to a maximum of Rs. 1,250 per month on pensionable salary of Rs. 15,000), 0.5% to EDLI, and 0.5% to EPF Administration charges (currently nil).

For certain industries (beedi, jute, coir, etc.), contribution rate is 10% instead of 12%. The government also contributes at 1.16% for new PF members (Pradhan Manthi Rojgar Protsahan Yojana).

UAN is a portable 12-digit number assigned to each EPF member. It remains constant across employments. All PF accounts of the member are linked to the UAN, making it easy to transfer and consolidate PF balances when changing jobs.

Members can activate their UAN through the EPFO portal, update KYC (Aadhaar, PAN, bank account), check balance, file claims, and track transfers online. UAN has made EPF management paperless and efficient.

Full withdrawal is allowed on retirement (at age 55) or on leaving employment after 2 months of continuous unemployment. If employed for less than 2 months, PF cannot be withdrawn and must be transferred to the new employer.

Partial withdrawals are allowed for specified purposes — marriage/education of children (up to 50% of own share), medical treatment (up to 6 months' wages), home purchase/construction (up to 90% of PF), home renovation, and unemployment.

The EPS provides monthly pension to employees after retirement. Members contribute 8.33% of wages (up to Rs. 15,000 per month) through the employer's contribution. The maximum pensionable salary is Rs. 15,000 per month.

Pension is calculated as: (Pensionable Salary × Pensionable Service)/70. Minimum pension is Rs. 1,000 per month. On death of the member, the family receives a pension (widow/children/orphan pension).

Employees' Deposit Linked Insurance (EDLI) provides life insurance cover to EPF members. In case of death while in service, the nominee receives a lump sum payment (maximum Rs. 6 lakhs based on average wages of last 12 months).

International workers (Indian workers going abroad for employment and foreign workers coming to India) are also covered under EPF. The employer must obtain a unique identification number. Contributions are based on applicable wages.