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    EPF – Employees’ Provident Fund, EPFO Benefits & Process

    • 5 min read
    • Last Modified Date: April 7, 2023
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    The Employees’ Provident Fund (EPF) is an employee-managed retirement fund that provides a pension to employees. The EPF scheme was launched in the 1960s to provide financial security during retirement.

    The Employees’ Provident Fund (EPF) is a mandatory contribution from an individual’s salary that every organization with more than 20 employees has to deduct.

    The EPF corpus provides financial security at retirement for salaried individuals who have worked in employment. It also helps them meet their family needs during their old age and illnesses by providing them with an assured pension after retirement.

    The EPF is a long-term savings plan, which means that your contributions will be invested in safe and secure schemes for the whole of your working life. You will earn interest on your investments, which can help you build a corpus to provide for yourself during old age.

    An EPF scheme is a retirement benefits scheme that allows workers to make small savings during their working years, and withdraw the accumulated amount after retirement.

    The EPF rules apply to all employees who earn more than Rs. 6,500 per month (with effect from 1st April 2016). The minimum contribution required by an employee should be 10% of his/her gross salary while the maximum can be 50% of his/her gross salary. It should be noted that employers cannot deduct any amount from salaries that are exempted under Section 80G or 80H Income Tax Act 1961; however, they may contribute up to 20% towards the EPF account without any deduction from the employee’s salary

    The employer should deposit the amount in a recognized PF scheme within 15 days of receiving it. If you are an employee, then you can check your EPF balance online by visiting the EPFO website.

    EPF Contribution

    Under the Provident Fund Scheme, the members contribute 12% of their Basic Salary towards EPF and an equal amount is contributed by their employer.

    • Employee contribution is 12% of the basic salary.
    • The employer’s contribution is 12% of the basic salary.
    • The total contribution is 24% of the basic salary
    Contribution by Monthly Percentage Contributed
    Employer 12%
    Employee 12% or 10%
    Total 24%

    EPF Benefits?

    The Employee’s Provident Fund benefits are given out by the Employees’ Provident Fund Organisation (EPFO), an organization set up by the Indian Government to ensure the implementation of the EPF Scheme

    The EPF is a saving scheme that provides financial security to salaried individuals at retirement.

    Also read Saving Schemes in India.

    The primary purpose of this scheme is to provide social security for its members and their dependents in case of illness, unemployment, or death before retirement age; however, it does not offer any insurance cover on account of accidental injury or accident during employment tenure.

    The EPF Scheme came into force on 1st April 1952. It is mandatory for all establishments employing 10 or more persons to register with the Employees’ Provident Fund Organisation (EPFO).

    The EPFO is a government-run organization that manages the Employees’ Provident Fund (EPF) Scheme. It is responsible for administering and monitoring compliance with the scheme. You can check if your employer has registered with the EPFO by calling their helpline number or checking their website. If your employer has not registered with this organization, then you cannot be paid any benefits under this scheme.

    The Employer’s contribution towards EPF forms part of your CTC

    This means that it is not taxable and will neither be counted as part of your salary or your paycheck.

    If your employer does not contribute towards EPF, you can claim the amount back from them. The same applies to PF and ESI as well.

    If you have received any of these benefits and your employer has not paid them for you, then you should file a grievance with them. If that does not work, then file a complaint with the Labour Department.

    To apply for a claim, you need to submit Form 19 to your employer

    This form can be submitted in person or by post and it must be signed by both the employee and the employer.

    If you are in a trade dispute, it’s important to submit Form 19 as soon as possible. If this form is not submitted within the first three days of your claim, then you may have difficulty getting the full benefit of your entitlement.

    To summarise

    • What is EPF?

    The Employee Provident Fund Scheme is a saving scheme that provides financial security to salaried individuals at retirement. It was introduced in 1953 but only became mandatory for all employers in 1964. The EPF system aims to provide employees with an adequate retirement corpus (money) which they can use after retirement, to meet their basic needs during old age.

    • How does it work?

    Employees contribute around 8% of their salary towards this fund and the employer contributes 12%, which accounts for 20% of the total contribution made by both parties towards their employee’s provident fund account annually; this portion is deducted from the employee’s paycheck automatically by his/her employer without any further action required on part of him/her except filling up form A1-A3 (i) within two months from when he/she joins duty at office premises or starts working from home unless otherwise specified by rules/regulations laid down under Section 10(1)(a)(iii).

    Both employees and employers have the right to use their PF accounts. Employees can withdraw their funds in emergencies, such as medical emergencies or natural calamities, but they are required to repay this amount within five years. Employers also have the option of withdrawing money from an employee’s PF account if they don’t want to keep him on their payroll anymore.

    Conclusion

    So it is important to understand the benefits of the EPF scheme and how it can help you achieve your financial goals. As you have seen, there are many different types of EPF schemes that are available depending on your circumstances. The best way to find out what’s right for you is by speaking with an expert in your industry who can advise on which one will suit your needs best.

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    EPF – Employees’ Provident Fund, EPFO Benefits & Process

    How much percentage is EPF deduction from salary?

    Employees contribute 12% of their pay to the Provident Fund. Employee State Insurance Corporation (ESIC) is also taken from gross wage, with 1.75% from employee contributions and 4.75% from employer contributions.

    How much EPF amount can be withdrawn?

    EPF can only be withdrawn after retirement, in cases of unemployment, or in exceptional exigencies. After two months of retirement or unemployment, a full withdrawal is possible. The new regulation permits EPFO to remove 75% of the EPF corpus after one month of unemployment. After finding new work, the residual 25% can be transferred to a new EPF account.

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