Employee Provident Fund (EPF or PF) is a social security benefit scheme by Govt of India. The employee provident fund is administered by the Employees Provident Fund Organization (EPFO), a statutory body developed by the government of India under the Ministry of Labor and Employment.
- All employees permanent, contract, temporary, causual, daily waged.
- Employees having a basic of Rs 15000/- and below.
Non eligible Employees
- Interns or Apprentices.
- Employees having a basic above Rs 15000/- .
There are three components in Provident Fund
- Employer Provident Fund
- Employer Pension Scheme (EPS)
- Employee Deposit Linked Insurance (EDLI)
Provident Fund Contribution Rates
- In certain cases, 10% PF rate is applicable, wherein Employee Share to A/c No. 1 will become 10% and Employer share will become 1.67%.
- Employees who are part of the EPF scheme for the first time will have both the employee and employer contribution only to PF ( 12 % + 12%). There will be no EPS contribution of 8.33%.
- If any employee having a basic salary of above Rs 15000/- and he/she intends to be pat of the PF scheme,then the employee and employer must place a joint request to the Regional PF Commissioner.
Every employee under PF has two particular no associated with his PF account : PF No and UAN
This is a number provided to him by his/her establishment. If an employee has worked in 4 establishments in his career till date and has been a part of aPF scheme in all of them , then he will 4 different PF no. This no is created by the employer.
PF No has 4 components
E.g : MH / BAN/45781/000/125
MH is the state (Maharashtra)
BAN is our PF office (Bandra)
000 refers to extension(three digit) . Information regarding the region where the PF is held.All organisations do not have it. It depends for company to company. In most cases it is zero. As we do not have it, it is 000.
125 is the employee’s PF no
The first is part of the company PF registration with EPF Office and hence will be common for all employees.
Only the last part differs from employee to employee.
Universal Account number (UAN)
The UAN is a 12 digit unique number allotted to each member of EPF. The employee can link multiple PF accounts nos under a single UAN.
In our previous example as the employee had worked with for 4 establishment in his career till date.
All his 4 PF account nos will be associated with this single UAN.
Multiple UAN cannot be created as UAN is seeded with Aadhar as per KYC guidelines. So even when an employee switches jobs his PF no will change, however his UAN will remain the same. The employee needs to provide this UAN no to his new employer.
TDS on PF withdrawal
- PF withdrawals of up to Rs 50,000 before completion of 5 continuous years of service. NO TDS.
- PF withdrawals is more Rs 50,000 before completion of 5 years of continuous service, then TDS as below:
- TDS @ 10% if PAN is furnished; Else 34.6 % TDS
- No TDS in case Form 15G/15H is furnished
- PF withdrawals after 5 years of continuous service. NO TDS.
- PF withdrawals before completion of 5 continuous years of service due to employment is terminated due to employee’s ill health OR employer business is discontinue OR for reasons beyond the employee’s control. NO TDS
EPF Administrative Charges Reduced to 0.5% from 0.65% from 01 June 2018.