PF registration is compulsory where more than 20 workers are working in an
organisation. This is a retirement scheme funded by the employee & employer.
Provident Fund is a retirement, government-managed retirement saving scheme which is used in many countries such as in India. Employees give a portion of their salaries to the provident fund and employer should also contribute the same amount on behalf of the employees. Then, the fund is held and managed by the government and eventually withdraw by the employee with interest on retirement or resignation. Provident Fund is regulated under the umbrella of EPFO or Employment Provident Fund Organisation .
Eligibility for Provident Fund
An employee earning wages upto Rs. 15,000 is compulsory have to register for the provident fund scheme however an employee who is earning more than 15,000 per month is eligible to become a member and make PF Contribution with the consent of the Employer and Assistant PF Commissioner.
Amount of PF Contribution
The PF Contribution paid by an employer is 12% of basic salary, dearness allowance and retaining allowance and an equal contribution will be paid by an employee.
Breakup of PF Contribution by employer
Here, we are going to sub-divide the 12% amount of PF Contribution to understand it better:
3.67% of PF contribution towards Employees’ Provident Fund,
8.33% of PF contribution towards Employees’ Pension Scheme.
Further employer is also required to contribute 1% for EDLI containing 0.5% & admin charges of 0.5%.
Due date of PF Filing
The employer must deduct the PF amount from the employee salary before giving it to the employee. Then the employer must give its and the employee portion to EPFO within 15 days of the close of every month.