EmploymentProvident Fund

How Many Employees are Required for PF Registration?

The article explains the way forward to PF registration for employers in India. It also speaks about the major criteria required for PF registration in favour of any business organisation.

How many employees are required for PF registration within any particular organisation? This is a very pertinent question, which the target audience has repeatedly asked. But, before we answer such questions, let us first understand how organisations register for PF.

What is an EPF scheme?

Employees Provident Fund (EPF) remains an independent scheme formulated as per the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. All PF schemes belong to the Employees’ Provident Fund Organisation (EPFO). EPFO remains one of the most popular global organisations offering a long-term social benefit to the employees in the long run. 

When did the Employee Provident Fund come into existence?

Interestingly, the employees’ provident fund scheme came into being through an ordinance in November 1951. However, in 1952, the scheme was replaced by the Employees Provident fund Act.

Is there any nodal agency that governs such acts?

A board of trustees managed under a particular tri-partite board manages the entire function of provident fund management. The representatives comprise the state as well as the central level. 

What are the functions of the Central Board of Trustees precisely?

The central board performs an essential function by paying off a contributory provident fund in favour of the concerned employee in any registered organisation in India. The board of trustees are actively involved in policy formulation at any time. 

EPF REGISTRATION

What is EPFO, and what are the functions of such bodies?

At the same time, it is important to note that, the Employees’ PF Organization (EPFO) consists of offices all across the country. Spread across 138 locations, it is important to note that the members of EPFO need to attend training at any given time on the newly formulated policies and mandates.

How many schemes do the board operate?

The Board operates three schemes – 

  • EPF Scheme 1952, 
  • Pension Scheme 1995 (EPS) and
  • Insurance Scheme 1976 (EDLI).

How many people do you need in your organisation for PF registration ?

Data collected from authentic sources reveal that there should be about 20 employees within an organisation in order to get them registered for the scheme related to the provident fund. 

Can other organisations voluntarily register if the number of employees remains less?

Yes, of course. It is understood that organisations with less than 20 employees can register for PF if they decide to do it voluntarily. However, the process of PF registration would require a detailed documentation process. 

What is the pay package that makes an employee eligible for PF registration?

As per the norms and guidelines related to PF, employees whose pay package remains to be  15000 are eligible for registering for provident schemes. Therefore, if you are an employee who gets a basic as well as expensive allowance of 15K, it is a mandate that the concerned employee needs to have an employee provident fund account.

Is PF registration a tedious process?

It is important to note that tax deducted at source remains a tedious process. Therefore, to enable a proper calculation of income tax, it is important that every business organisation register for the scheme related to PF. 

Is EPF registration a tedious process?

As per the data available, it is understood that EPF registration is a very tedious process for any organisation. It is important to note that, in order to fulfil the PF scheme mandate, employers are required to process remittances from the PF office once they submit the challans as proof of remitting the PF entitlement for the concerned employee or a group of employees.

What are the benefits of PF registration?

Registering the details of the employees under the PF scheme has several benefits. These benefits include:

  • Coverage of risk related to employment within a particular tenure. Risks might be related to coverage of illnesses, retirement or untimely death of the employee under consideration. 
  • The account lends a unique and uniform coverage. At the same time, such statements are transferrable to any particular destination if the employee is transferred or shifted based on job requirements.
  • A direct linkage to employee deposit linked insurance.
  • PF deposition and successful contribution from the employer can create a rich corpus to be availed by the employee during any particular emergency.
  • A PF account can be used successfully for any financial assistance that one might require during any particular phase of life.

Getting yourself a PF account can help the employee have the necessary pension coverage.

Calculate how much money will be accumulated in your EPF account when you retire with Vakilsearch’s EPF calculator India.

Registration of PF by Employers: Some Intricacies

Do you know that EPF registration is required in any business organisation that remains regularly functional? Please note that any particular business organisation must register for the EPF scheme if it is properly functional. Application for PF registration must be completed within one month of writing the corporate office. In some instances, penalties are also applicable if the business organisation fails to complete the EPF registration.

Can employees separately apply for PF registration?

Under normal circumstances, employees can never register for the process of PF registration on their own. However, certain exceptions can be made when organisations deploy less than 20 people at a given time.

EPF registration: Facts Vs Figures

EPF registration needs to be done as per the rules and regulations of the Government of India. However, it is essential to note that the entire responsibility of the process lies with the employer at any given time.   A Provident fund entails a 12% contribution from the basic salary and must be equally contributed by the employee and the employer. If the organisation deploys less number of employees, then the PF deduction rate reduces to 10%

Conclusion

Registration to EPF is a mandate that every business organisation needs to follow. However, the entire process remains document-driven, although a minimum number of employees being deployed can help the employer meet the necessary criterion. If you want to know more about such processes, you can visit the website of Vakilsearch, a professional legal firm headquartered in Chennai India.

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