EPFO Registration

Overview of EPFO Registration

EPFO is the largest social security organization with a large volume of financial transactions taking place. EPF is the benefits availed to the employee on their retirement in the form of Provident Fund.

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  fulfil 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.

What is EPF Registration?
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.

What is the Meaning of Employee Under The Employee Provident Fund Registration?

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 an individual who is considered as any worker getting some proportion of the wages either indirectly or directly.

The various categories of employee covered, are enlisted 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 give consulting-based services for a fixed time to an establishment and who 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.

Applicability of EPFO Online Registration

EPFO 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 mandatorily 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.

What is the Benefit of EPFO Registration?

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  a number is provided to the employee which  stays 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 in 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.

EPF Registration UAN (Universal Account Number) :
Once the establishment is registered in the EPFO portal, it updates the KYC documentation of its employees by generating a Universal Account Number (UAN). Every employee can use their UAN number to claim PF fund, transfer of PF fund online to the bank account, etc. The only necessary step that an employee has to follow is activate UAN through the following procedure:

• An employee can visit online for its UAN activation on the official website of EPFO https://unifiedportal-mem.epfindia.gov.in/memberinterface/
• Complete the details such as UAN, Member Id, Aadhar Number, PAN number, etc
• After that mention your details such as name, address, contact details and complete the form by filling captcha on the screen
• After completing these details, the employee will receive an OTP on his mobile number registered with UAN.
• Employee shall check the box “I Agree” and validate the OTP for activating UAN.

Mandatory Compliance :
Once the establishment is registered with EPFO, it shall comply with certain mandatory provisions monthly/annually as prescribed under the act:

• Monthly return is filed online through the establishment login by uploading the ECR sheet.
• Return is filed online with the 15th of succeeding month
• ECR sheet can be downloaded through EPFO in the XML sheet that contains name & UAN of every employee registered with the establishment during the month for which return is filed.
• XML sheet shall be converted into a Comma-dilemma file for uploading the same for return filing.
• Complete the return filing by contributing online payment gateways.

Contribution Rate :
Rate of contribution varies depending upon the number of  employee employed in establishment:

• For Establishment Hiring Employees 20 Or Above

Employer and employee of such establishment shall contribute up to 12% of the employee’s salary (Basic wages + Dearness allowances)

• For Establishment Hiring Less Than 20 Employees:

Following establishment that shall contribute at the rate of 10% of basic wages of the employee in spite of 12%.

• An establishment having up to 10 employees and get voluntary registration under EPFO.
• Any establishment incurred loss during the previous year
• Other establishments such as Brick Factory, Jute Factory, Beedi making factory, etc.

What is the Online Procedure of EPFO Registration?

Employer Registration :
Apply online on the official website of EPFO https://www.epfindia.gov.in/ by selecting the option of “Establishment Registration”. Complete the details of employers such as the name of the establishment, address of the establishments, details of owner/employer, PAN of the employer, etc.

Verification Through OTP :
Once the online form is completed & upon submitting the form online, the applicant will receive OTP Pin on his registered email id and mobile number, which shall be verified to activate establishment login.

Establishment Login :
Once the employer registration is completed and verified, the applicant can log in with the credentials for completing the details of the Establishment. 

DSC Registration: After the registration of the establishment is completed, the applicant needs to register the DSC online by Selecting the "DSC/E-Sign" option from the drop-down menu. DSC is registered for authorized signatory on behalf of such an establishment.

Registration Certificate :
Once the registration is completed, the department allows the EPF registration certificate in form 5 containing the Unique Identification Number.

Update KYC Of Every Employee :
After the registration is completed and form 5 is allotted, the applicant shall update the KYC of every employee by uploading Aadhar, bank statement and other details for the generation of UAN number of its employee.

Common Registration :
Entities willing to get themselves registered under EPF & ESI both, can now through common registration facility available under which entity can get the EPF Code number and ESI Code number by filling the single application.

Documents Required for EPFO Registration

Following documents are required for filing employer registration & establishment registration under EPF:

• Name of the employer
• PAN Card of the employer
• Id proof such as driving license/passport/voter-id
• Address proof of registered office such as electricity bill/rent agreement (in case premise is rented)/registry (for owned premise)
• In case the establishment is society, trust, LLP or company, copy of Certificate of Incorporation is needed
• Partnership deed, id proof & address proof of every partner if the establishment is partnership firm
• MOA & AOA if the applicant is a private or public company

Details of employees for allotment of UAN number:

• Aadhar card
• Pan card
• Bank account details such as account number & IFSC Code
• Contact number & email id
• Date of birth as per Aadhar
• Designation of employees

Contribution Rate - EPF

Rate of contribution varies depending upon the number of an employee employed in establishment:

Lately, Finance Minister Nirmala Sitharaman officially announced depletion in statutory EPF contribution of private sector employers and employees from the previous compulsory 12% to 10% for the upcoming three months. Government’s goal is to give relief against pandemic, coronavirus. In case of government PSUs the contribution of employers will remain at 12% while PSU employees can pay 10%. Reduction in the employee’s contribution from 12 % to 10% offers a plus point. It helps in increasing the take home pay or the cash-in-hand of the employee.