Employee’s Provident Fund (EPF) & ESI

Employees Provident Fund (EPF) is a scheme controlled by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. PF registration is applicable for all establishment which employs 20 or more persons. Under EPF scheme, an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer. The employee gets a total amount including self and employer’s contribution with interest, on retirement or resignation.

Eligibility

It is obligatory that employees’ drawing less than Rs 15,000 per month, to become members of the EPF. As per the guidelines in EPF, employee, whose ‘basic pay’ is more than Rs. 15,000 per month.

Amount of PF Contribution

The PF contribution paid by the employer is 12% of (basic salary + dearness allowance + retaining allowance). An equal contribution is payable by the employee. In case of establishments which engage less than 20 employees or meet certain other conditions, as per the EPFO rules, the contribution rate for both employee and the employer is restricted to 10%. For most employees working in the private sector, it’s the basic salary on which the contribution is calculated.

Employees Pension Scheme

Out of employers’ contribution, 8.33% will be routed to Employees’ Pension Scheme, which is calculated at Rs 15,000. The amount routed to EPS would be Rs. 1250 for employees whose basic pay amounts to Rs 15,000 or more. However, if the basic pay is less than Rs 15000, then 8.33% of such amount would be routed to EPS, the balance will be retained in the EPF scheme. On superannuation, the employee would receive the full share plus the balance of employer’s share reserved for his credit in EPF account.

Due Date for filling

The employee portion and employer portion are payable to the EPFO, within 15 days of the close of every month.

ESI Registration

ESI was  applicable for factories that employed ten or more persons. Subsequently, the coverage of ESI scheme has been expanded. any establishment employing ten or more persons drawing wages of upto Rs.21,000 per month must obtain ESI registration.

Number of Employees Required for ESI Registration

To determine the coverage of a factory or an establishment under ESI, the following categories of persons are to be counted in addition to the persons directly employed:

  1. Persons on the roll of a factory, who are on leave with or without wages.
  2. A substitute or badli worker employed for wages.
  3. Directors who are on the pay roll of a company.
  4. Persons drawing over Rs.21000 per month as wages, but not coverable otherwise.
  5. Persons employed by, or through a contractor and working under the direct supervision of the employer.

Benefits of ESI Registration for Employee

  • Medical Benefit
  • Sickness Benefit
  • Maternity Benefit
  • Disablement Benefit
  • Dependant Benefit
  • Funeral Expenses
  • Unemployment Allowance

PF Return Filing

All employers having PF registration are responsible to file returns on a monthly basis. The filing of returns must be completed by the 25th of each month. This article deals with the filing of provident fund returns, and the various forms through which the purpose must be fulfilled

Form 2

This form is filed for the purpose of declaration and nomination under the flagship schemes of Employees Provident Fund and Employees Family Pension. It must be filed by an employee when he joins an entity. The form must be submitted along with Form 5. Form 2 is divided into two distinct parts:

  1. Name
  2. Address
  3. Relationship with the subscriber
  4. Age
  5. Sum of money to be paid to the nominee
  6. Guardian details (if the nominee is a minor)

Part B should contain the details of the nominee as already specified in Form A. In addition to it, details of the family members who are eligible to receive the children/widow pension must be furnished.

Form 5

Form 5 is a monthly report which contains details pertaining to the employees who have been newly enrolled into the provident fund scheme. The form must include the following details:

  1. Name of Organization
  2. Address of organization
  3. Code number of organization
  4. Account number of employee
  5. Name of employee
  6. Name of the husband/father
  7. Date of Birth of the employee
  8. Date of joining
  9. Track record of work

Form 10

  1. Account number.
  2. Name of employee.
  3. Name of the father or husband.
  4. Date of leaving service.
  5. Reason for leaving service.

Form 12A

Form 12A is a report that includes the details of the payments contributed to the account of the respective employee in a particular month.

Annual PF Return Filing

Annual returns must be filed by the 30th of April in a given year. The forms utilized for filing these returns are:

  1. Form 3A
  2. Form 6A

Known as a member’s annual contribution card, Form 3A depicts the month-wise contributions made by the subscriber/member and employer towards E.P.F and Pension Fund in a particular year. The data is calculated for every member who is a part of the scheme. In addition to it, the scheme will include the following details:

  1. Account number
  2. Name of the subscriber
  3. Name of the father or husband
  4. Name and address of the factory/establishment
  5. Statutory rate of contribution
  6. Voluntary contribution rate, if any
  1. Form 6A is a consolidated annual contribution statement that contains details about the annual contributions of each member of the establishment. The form should include the details as enumerated below:

    1. Account Number
    2. Name of the member/subscriber
    3. Wages, Retaining allowance (if any) and D.A. including cash value of food concession paid during the currency period
    4. Amount of worker’s contribution deducted from the wages
    5. Employers contribution (EPF and Pension)
    6. Refund of advances
    7. Rate of higher voluntary contribution (if any)
    8. Remarks

     

Annual Account Statement

While the employer is entrusted with the responsibility of filing returns through the above-mentioned forms, the Employees Provident Fund Organization (EPFO) is regulated to send the annual statement of accounts to each subscriber through his/her employer. The statement of accounts will reflect the following details:

  1. Opening balance of contribution, which includes interest of both employer and employee.
  2. Annual contribution of both the employer and employee.
  3. Interest earned on contributions.
  4. Total number of contributions made by the employer and employee.
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Employee PF & ESI

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