Employees' Provident Fund (EPF) deposits are deducted every month from the salary of working people. Employees' Provident Fund is a mandatory contribution from the salary of an individual that every company which has more than 20 employees has to deduct. EPF accounts are overseen by the Employees' Provident Fund Organisation (EPFO), which is under the Ministry of Labour & Employment. EPF contributions are shared equally between employees and employer. Thus, both employee and employer contribute equally towards EPF, which is thus shown as a deduction in the cost-to-company or salary structure of an employee.
Here are 10 things to know about Employees' Provident Fund (EPF) contributions:
1) An employee contributes 12 per cent of his salary towards EPF while an employer pays 12 per cent, out of which 8.33 per cent is invested in Employee's Pension Scheme (EPS) while the balance 3.67 per cent is invested in EPF. EPS is also run by the EPFO.
2) EPF allows for accumulation of money with interest, which can be claimed upon retirement, resignation and death.
3) Partial withdrawals from EPF accounts are allowed for specific expenses such as house construction, higher education, marriage, illness.
4) The current interest rate on EPF contributions has been fixed by the EPFO at 8.55 per cent with effect from April 1, 2018.
5) Contributions under EPF are payable on maximum wage ceiling of Rs 15,000 by employee and employer.
6) The employee can pay at a higher rate and in such case an employer is not under any obligation to pay at a higher rate, according to epfindia.gov.in.
7) A Universal Account number or UAN is generated for each EPF contributor. UAN acts as an umbrella for multiple member IDs allotted to the same individual by different establishments.
8) An EPFO member is required to be registered on member portal to file the transfer claim online. The detailed process flow for the registration is available at the link available on the homepage of EPFO website www.epfindia.gov.in. This can be accessed through the link - For Employees > Online Transfer Claim Portal (OTCP) > Detailed Instructions > Process flow for registration on Member Portal or at the URL http://memberclaims.epfoservices.in.
9) Seeded Aadhaar against activated UAN is mandatory for online EPF claim submission.
10) EPFO services are now available on the UMANG (Unified Mobile APP for New Governance). The UMANG APP can be downloaded by giving a missed call 9718397183. The APP can also be downloaded from UMANG website or from the play/app stores.