Upon meeting the specified EPF registration eligibility criteria and upon enrolment with the EPF, the establishment is obligated to contribute a specific percentage to the fund. The other share is deducted from the employee’s salary. Additionally, the employer must initiate the EPF registration for their workforce, as employees cannot independently complete the registration process. In this blog, we shall see the EPF registration eligibility criteria.
EPF Registration Eligibility Criteria
To ensure compliance with EPF regulations, establishments must meet specific eligibility criteria for registration. Mentioned are the key points to consider for EPF registration eligibility criteria:
1. Workforce Threshold for Factories:
A factory must be engaged in an industry with a workforce of at least 20 employees or more.
2. Employee Threshold for Other Establishments:
Other establishments, not classified as factories, should have a workforce of 20 employees or fall into classes specified by the central government through an official notification.
3. Timely Registration Requirement:
Employers are required to complete EPF registration within one month of recruiting the 20th employee. Failure to do so may result in penalties.
4. Maintenance of Minimum Employee Strength:
If the registered organisation’s employee strength falls below the minimum threshold, the central government may apply provisions for organisations with less than 20 employees after issuing a notice of two months for mandatory registration.
5. Voluntary Registration for Organisations with Less Than 20 Employees:
Organisations with fewer than 20 employees may still opt for EPF registration voluntarily as they are considered fit under EPF registration eligibility criteria.
Whether your organisation employs 20 individuals or more, EPF registration is mandatory for compliance. Even if the employee strength is below 20, registration under the EPF scheme remains an option and can be pursued voluntarily by organisations as they meet EPF registration eligibility criteria. It is crucial for employers to be aware of these EPF registration eligibility criteria and adhere to the timely registration requirements to avoid penalties.
Importance of EPF Registration for Employers
EPF registration is vital for employers for several reasons, including financial management and regulatory compliance.
1. TDS Deduction and Salary Processing:
EPF registration is essential as TDS (Tax Deducted at Source) is deducted from employees’ salaries. Employers play a vital role in processing these deductions accurately.
2. Remittance Processing through EPF Employer Portal:
Employers are required to process all EPF remittances after generating the challan through the EPF employer portal. This ensures timely and accurate submission of contributions.
3. Mandatory Regulatory Compliance:
EPF registration is mandatory for employers, ensuring compliance with regulatory requirements. Failure to register can lead to penalties and legal consequences.
4. Partial Withdrawal for Specific Purposes:
EPF allows partial withdrawal after completing at least 7 years of deposits. Withdrawal purposes may include marriage, education for a child or sibling, and other specific needs.
5. Home-Related Withdrawals:
Withdrawals for the purchase or construction of a house, buying land, or home loan repayment are permitted. Certain conditions, such as completing at least 5 years before withdrawal, apply.
6. Maximum Withdrawal Limit:
Employees can withdraw at least 50% of the accumulated amount. For specific purposes, the maximum withdrawal limit is around 90% of the corpus amount.
7. Facility Renewal and Utilisation:
Employees can renew the withdrawal facility for home-related purposes, allowing them to avail themselves of this benefit twice during their employment.
Documents Required for EPF Registration
Ensuring a smooth EPF registration process involves providing the necessary documents along with EPF registration eligibility criteria. Mentioned below is a list of documents required:
1. Bank Statement or Cancelled Cheque:
Submission of the company’s bank statement or a cancelled cheque is required for EPF registration.
2. Digital Signature:
The digital signature of the partner, director, or proprietor is essential for authentication purposes during the registration process.
3. PAN Card:
PAN card of the partner, director, or proprietor needs to be submitted as a proof of identity for EPF registration.
4. Aadhar Card:
Aadhar card of the director, partner, or proprietor is required for identity verification during the EPF registration process.
5. GST Certificate, Shop and Establishment Certificate, or Other Licences:
Submission of relevant business licences, such as the GST certificate, shop and establishment certificate, or any other government-issued licence, is necessary for EPF registration.
6. Address Proof:
Address proof for the registered office must be provided. This can include documents like water bills, electricity bills, or telephone bills.
Ensuring that all these documents are in order and submitted accurately along with meeting EPF registration eligibility criteria is crucial for a successful EPF registration. These documents serve as essential proofs and verifications to comply with the regulatory requirements of the Employees’ Provident Fund.
Steps to Register for EPF
If you are an employer seeking to register for the Employees’ Provident Fund (EPF) who has met the EPF registration eligibility criteria, follow these steps for a smooth registration process.
1. Visit the EPFO Official Website
Go to the official web portal of the EPFO at https://www.epfindia.gov.in/site_en/index.php to initiate the company registration process.
2. Download the User Manual
After clicking on the “Establishment Registration” option on the homepage, you will be taken to a page. Here, find the user manual and carefully review it.
3. Register on the Unified Portal
Click on the “Registration” tab on the home page, and then go and find the “Sign Up” tab to register on the unified portal.
4. Fill Out the Registration Form
Log in to the website and find “Registration for EPF” on the left side of the screen. Choose the option “Applying for New Registration” on the right side of the screen. Select the “Provident Fund and Miscellaneous Provisions Act 1952” as an employer and click “Submit.”
Upon clicking “Submit,” the page for the EPF registration form will be displayed. Fill in all the necessary details, attach the required documents, and upload the employer’s digital signature certificate. The platform will then send an email confirming the successful completion of the EPF registration after the digital signature is uploaded.
Tips for Checking EPF Registration Eligibility Criteria for Online PF Transfer
Ensuring a smooth online PF transfer process involves understanding the EPF registration eligibility conditions. Here are some tips to check eligibility for online PF transfer:
1. Transferability Conditions:
Online PF transfer is available when an employee wishes to transfer the Provident fund balance from a previous employer to a new employer. The employee can initiate the transfer claim, which needs attestation by either of the employers.
2. Updated Form 13:
The traditional process involved filling out and signing Form 13, which required submission to the new employer after attestation by the previous employer. To address issues such as misplacement and follow-ups, a revised Form 13 has been introduced.
3. Submission to Either Employer:
The revised Form 13 can now be submitted to either the new or old employer, providing flexibility and reducing administrative hassles associated with following up with human resources in both companies.
4. Understanding Terms and Conditions:
EPF allows fund transfers under specific terms and conditions. Employees should familiarise themselves with these conditions to ensure a seamless transfer process.
5. Importance of EPF:
Recognise the significance of EPF as a beneficial scheme for all employees. It encourages salaried individuals to set aside a portion of their earnings for retirement. This becomes particularly important as not everyone may have the financial knowledge or means to make adequate provisions for retirement through savings and investments.
6. Financial Planning with EPF:
Emphasise the role of EPF in aiding financial planning for employees. While individuals may have other savings and investments, EPF provides a convenient and essential avenue for securing a portion of earnings for retirement.
Final Thoughts
EPF registration eligibility criteria are vital for employers to comply with regulatory standards. Factories must engage a workforce of at least 20, while other establishments should have 20 employees or as specified by the central government. Timely registration within one month of employing 20 individuals is mandatory, and failure may result in penalties. The central government can apply provisions for organisations falling below the threshold after a two-month notice. Voluntary registration is available for organisations with less than 20 employees. Adhering to these criteria ensures seamless compliance with EPF regulations, safeguarding both employers and employees in the process.
