EPF stands for Employee Provident Fund, a scheme governed and regulated by a body named Employee’s Provident Fund Organization (EPFO) constituted under Employee’s Provident Funds & Miscellaneous Provisions, Act 1952.
Employee Provident Fund (EPF) is an advantage provided to the employee during the retirement. It is a fund created for the social security and to fulfill the purpose of granting the stability and financial security during retirement. For all the organizations with more than 20 employees it is a compulsory requirement for them to have Employee Provident Fund Registration. It is mandatory for the organizations to follow the respective guidelines and comply with the same.

According to section 2(f) of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 an employee includes any form of individual who is carrying out any work with the objective to secure some form of wages. This would also include individual who is considered as any worker getting some proportion of the wages either indirectly or directly.
The individuals who are considered as an employee are given below:

• Full-Time Employees-Full-time employees include any individual who has some permanent history of employment with the company. This would be decided on the basis of relationship which is existing between the Company and the worker. The appointment letter can be considered for verifying the employment provision.
• Part-Time Employees-Any employee who is working as a part-time basis for any establishment would be classified as part time employees and be registered under the EPFO. A part-time employee has lesser work hours in comparison with the full-time employee.
• Work From Home Employees-Any employee who is working from home for a fixed time period can also be considered for the employee provident fund registration by the organization.
• Contractors-Contractors are particular individuals appointed for carrying out particular projects according to the requirement of the business. EPF registration is necessary for establishments that recruit contractors.
• Consultants-Consultants are individuals as defined according to their experience. They are giving consulting-based services for a fixed time to an establishment and are neither contractor nor any part-time employee.
• Free Lancers-In the recent amendment on the Social Security Code introduced in September 2020, the Government of India has included individuals who are freelancers to be considered under the definition of an employee. The freelancers also can make use of the services given under the employee provident fund registration.

EPF registration applies to the following establishments:

• Establishment that is employing 20 or more employees during any time in the previous year
• Factory engaged in any industry having 20 or more employees during any time of the year.
• Central Government, after giving two months’ notice to the certain establishment for compulsory registration irrespective of their employees. Such an establishment shall get themselves registered immediately upon the receipt of the notice.

The eligibility criteria are:

• Compulsory Registration
  The organization which has more than 20 employees has to mandatory register according to the requirements of EPFO.
  
• Voluntary Registration
  An establishment which has less than 20 employees can choose for voluntarily registration.
  
• All Establishments
  Any form of organization which is acknowledged according to the requirements of the act will have to register under the Employee Provident Fund.
  

• Employer contributes-The employer contributes some proportion to the EPF fund along with the employee. The employer also adds his contribution that is inclusive of the employee pension scheme (EPS).
  
• Financial support-Provident fund acts as financial support at the time of retirement, illness, demise, disability or any similar risk occurred to the employee.
  
• Carry forward-PF account of an employee need not to be closed in case the employee switches his job as the same can be carried forwarded.
  
• Long term plans-PF funds can be used by the employee for long term plans.
  
• Reduces Risk-The employee provident fund reduces the significant proportion of risk that would serve advantageous for both the employees and the dependants. This fund will be used during the emergency time and other form of contingency.
  
• One Account-After the employer goes for the online PF registration and then a number is provided to the employee which shall stay the same even if the employee changes his job. This number will stay valid throughout the India. Therefore, even if the employee switches to a different location for the reason of carrying his employment further, then this number shall stay unchanged.
  
• Employee Deposit Linked Insurance Scheme (EDLI)-Under this scheme, it provides benefits with respect to insurance to all the employees. The rate of charge is 0.5% to the account. Any member who wants to utilize this scheme will have to specifically sign up for the same.
  
• Retirement Savings-Taking into consideration that the employee provident fund registration grants extraordinary benefits like it is a mode for retirement savings. After a particular time period, the retirement benefits can be used through this scheme.
  
• Pension-Under this scheme, the form of deduction is carried through the salary account. Under the provision of EPF, 12% is deducted and then it is credited to this fund. More than 8.33% from this proportion is credited directly to the requirements of pension. Due to this advantage, an employee can think about such savings as a necessity after their retirement.
  

1. Eligibility:

   • Any salaried employee who is a resident of India is liable to be a member of the employee provident fund scheme.
     
   • The employee is liable for this scheme right from the first day of his/her joining to any job.
     
   • Once the employee becomes a member, he/she is responsible for provident funds benefits along with the insurance and pension benefits.
     
   • It is mandatory for employees having a salary of Rs. 15,000 or more to be a member of this scheme although the employee can voluntarily apply for it at any wage.
     
   • The employee contributes a minimum 12% of salary (can voluntarily contribute more).
     

2. Employee Contribution:

   • 12 % Of Basic Pay Plus DA- For Employee’s Salary up to Rs.15,000
     
   • 12 % Of Basic Pay Plus DA/12% of Rs.15,000 – For Employee’s Salary is above Rs. 15,000
     

3. Voluntary Contribution:

   • An employee can voluntarily contribute above the stipulated rate of Provident Fund contribution by opting for the voluntary scheme at any rate so desired, also up to 100% of Wages.
     
   • The contribution to VPF should not be a fixed amount, but should be a certain % of wages. However, the employer is not legally bound to contribute at the enhanced (increased) rate.
     

4. Employer Contribution:

   • The minimum amount of contribution to be made by the employer is set at a rate of 12% of Rs. 15,000 (although they can voluntarily contribute more). This amount equals Rs. 1,800 per month. It means that both the employer as well as the employee has to contribute Rs. 1,800 each per month towards this scheme
     

PF Contribution amount is a sum of the employee’s contribution to Provident Fund deducted from the employees’ salary and the employer’s contribution. PF Contribution amount is to be deposited on or before 15th of the month following the month in which deduction is made. Example, PF contribution for the month of April, is to be deposited on or before the 15th of May.