Employee Provident Fund – A brief Introduction
Employee Provident Fund Scheme is one of the most useful employee beneficial schemes introduced by the Ministry of Labour. It is one of the ideal retirement funds. It is a type of savings account where both employer and employee contribute an equal amount at regular intervals. Such contributions can be made only by those employers who are registered and employees of registered employers. EPF Registration can be either through statute mandate or voluntary. Provisions w.r.t EPF is governed by The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (PF Act).
As per the PF Act, every company/organization employing more than 20 individuals including employees who are on the contract is mandatorily required to register under the PF Act. Once the PF Act is applicable, the employer organization continues to be governed by the PF Act even if the number of employees falls below 20 at any time.
Further, it is not mandatorily applicable to all employees of the registered establishment. Only such employees earning up to Rs 15,000 are eligible to be covered under the PF Act and can make a contribution. Both employers and employees who are not mandated by the PF Act can voluntarily register and contribute to PF.
PF Fund is administered and managed by The Employees’ Provident Fund Organisation (EPFO) and assists the Central Board of Trustees, EPF a statutory body formed by the PF Act.
PF Payment Online
Though contribution to PF account is made both by employer and employee, payment is to be made to the PF account by an employer who is registered with the PF Act. It is mandatory for all establishments to pay PF online from September 2015. Online PF payment can be made by the employer either on the EPFO website or through authorized bank websites (if the bank allows direct payment through their website) in which the employer has an account and net banking. Presently EPFO has a tie-up arrangement with 10 banks to collect EPFO dues and banks are SBI, PNB, Indian Bank, Allahabad Bank, Union Bank of India, Bank of Baroda, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank.
Procedure to do the EPF payment
Step 1: Log in with your User Name and Password
Step 2: In the home page. Select the PAYMENT tab. Select the ‘Payment (ECR)” from the drop-down menu.
Download the previous month's ECR by mentioning the wage month. Select the File Type as ECR.
ECR in Excel format will be downloaded. This is a simple sheet with no formulas. Edit the columns as mentioned below:
- Column A: UAN - Will be already mentioned in the sheet for all employees to whom the payment is made until November 2016
- Column B: MEMBER NAME - Will appear against the UAN Number
Note: The UAN and the Name of the new employees can be added to the list
- Column C: GROSS Wages - Mention the Gross Wages
- Column D: EPF Wages - If the Gross Wages are above Rs.15,000/-. EPF Wages to be limited to Rs.15,000/-
- Column E: EPS Wages - Same as that of Column D
- Column F: EDLI Wages - Same as that of Column D
- Column G: EPFI CONTRI REMITTED - Use the formula 12.00% * Column D (round off to 1)
- Column H: EPS CONTRI REMITTED - Use the formula a 8.33% * Column E (round of to 1)
- Column I: EPF EPS DIFF REMITTED - Column G - Column H (round off to 1)
- Column J: NCP Days (Ensure that decimals are not there. Half days to be round off to 1)
Step 3: Save the file as CSV (Comma delimited)(*.csv)
Step 4: Open the CSV file using Notepad
Step 5: Replace comma (,) with #~#
Step 6: Remove the entries with respect to the Column heading. Also, remove the blank lines in the end (if any)
Step 7: Save the file as Text file (*.txt)
Step 8: Upload the Text file. On successful upload of ECR, click 'Proceed'
Step 9: Go to the PAYMENT section
- The different Accounts Heads will appear as default. You have to manually enter the below administration charges.
- A/c No: 2 (Administrative charges for PF) - 0.85% of Total EPF Wages (Note: If the amount is less than Rs. 500/-. Then a minimum of Rs. 500/- to be entered)
- A/c No: 22 (Administrative charges for EDLI) - 0.01% of total EDLI wages (Note: If the amount is less than Rs. 200/-. Then a minimum of Rs. 200/- to be entered)
Step 10: You can verify the same and proceed with GENERATE CHALLAN. TRRN number will be mentioned on the webpage itself
Step 11: You can download the Acknowledgement slip and Challan Receipt
Step 12: Pay the amount by clicking the PAY option. This will take you to the online payment option. Proceed with the payment option. Download the payment confirmation receipt