Employee Provident Fund (EPF) – Contribution, Benefits & How to Withdraw PF Online?

Employee Provident Fund(EPF)

Employee provident fund is a scheme designed to help employees to invest in their future. Employees and employers are both required to contribute to the EPF fund.

The Provident Fund is deducted from the employees’ monthly salary. When they retire, however, this amount will be provided to the same employees. All companies follow the EPF plan, which is governed by the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952.

Employees are essential for companies or businesses to achieve their desired goals in a competitive market. As a result, businesses implement a variety of incentive programs to motivate their employees. One of these reasons is that businesses can contribute to the EPF scheme.

How many employees contribute to EPF?

For the PF employees and employers, both contribute.

As per the different categories, employers have to contribute to the provident fund. Like,

For Employees Provident Fund -> 3.67%

For EPS(Employees pension scheme) -> 8.33%

Also, employers deduct 12% of the employees’ salary for the EPF.

In the simple world, employees and employers both contribute to the EPF equally.

For example, if the A Employees earn 15,000 Rs. on the monthly basis then their EPF is calculated,

Employees contribution to EPF : 12% x 15,000 = 1800

Employer contribution to EPF : 3.67% x 15,000 = 550.5

Employer contribution to EPS : 8.33% x 15,000 = 1249.5

According to the above calculation, companies can contribute the PF for their team every month.

EPFO(Employee Provident Fund Organization)

EPFO stands for the Employee Provident Fund Organization. This organization is managed by the ministry of labor and employment, the government of India which promotes employees to save funds for retirement. This organization was established in the year of 1951.

Center Board of trustees contributed provident fund, pension scheme, and an insurance scheme for the organized sector in India. This board operates 3 schemes: EPF Scheme 1952, Employees’ Deposit-linked insurance scheme 1976(EDLI), and Pension Scheme 1995(EPS).

The Employees’ Provident Fund Act and the Schemes established under it are governed by a tripartite Board known as the Central Board of Trustees, Employees’ Provident Fund, which is made up of representatives from the state and central governments, employers, and employees.

Eligibility to a member of Employee Provident Fund

They follow a set of rules and regulations for each scheme. And some of them have limitations on how they can apply or use the schemes. Employees must meet requirements to join the EPF.

1. Any person who is paid to work in a business, whether it be a manual or non-manual job.

2. Any person who is hired through a contractor or who is engaged as an intern but is not an apprentice as defined by the Apprentices Act of 1961.

3. Any person can use the PF schemes which earn monthly 15,000 or more other than excluded and exempted employees under Section 17 of the Act.

Benefits of EPF

While registering under the EPF scheme employees get several benefits including

• When the user wants the money then they can withdraw or take advances.

• The nominees or legal heirs receive the PF amount of a deceased member.

• Employers not only contribute to EPF but also contribute to the EPS. As a result, employees can use this money after retirement.

• Employees are ensured that they receive the cash payment with the EDLI scheme if they die while on the job.

• Employees can receive tax-free returns under the EEE (Exempt, Exempt, Exempt) tax benefit under the Income Tax Act.

• Employees can get special benefits like, they earn additional money in the form of interest on their savings.

• If a member moves jobs, his or her PF account can be transferred to another company that offers the same Provident Fund scheme.

Also Read: WHAT IS A BANK RECONCILIATION STATEMENT? STEP-BY-STEP GUIDE

How to Withdraw PF Online?

Employees who participate in the EPF plan can withdraw their funds as needed or take advantage of the benefits. This is the most important benefit of the PF, and in this day and age of the internet, employees may simply withdraw their money by following a few simple steps online.

Step 1: Members have to visit the e-Sewa portal on the EPFO portal.

Step 2: Now sign in to your account with your secure password, UAN, and Captcha code.

Step 3: From the ‘Online Service’ tab, select ‘Claim (Form – 19, 31, 10C, & 10D)’

Step 4: This web page opens when you provide the correct bank account number linked with UAN.

Step 5: Click on Verify

Step 6: You need to confirm the Terms and Conditions of EPFO, after verifying bank account details.

Step 7: Now select the option – ‘Proceed for Online Claim’

Step 8: When you withdraw PF then you have to select the reasons from the drop-down list. This listing is a show option as per your eligibility.

Step 9: Individuals must submit their address after they have selected the reasons for withdrawal or advance. Individuals receiving a cash advance must specify the amount and attach a scanned copy of the appropriate documentation (as instructed by EPFO).

Step 10: Select Terms and Condition

Step 11: Now get the ‘Aadhaar OTP’

Step 12: Enter the OTP that you receive in your registered mobile number.

Step 13: After providing OTP, Online claims for EPF withdrawal will be submitted successfully.

Individuals must activate their UAN and link it to their KYC, which includes their Aadhaar, PAN, and bank credentials, to withdraw EPF online. Individuals can easily claim EPF withdrawal after all of the requirements are completed.

How to check EPF claim status?

When an EPFO member has decided on their EPF amount, they must complete the above procedure to submit their withdrawal request. They check their status on the EPFO website and make a missed call from their registered mobile number to 011-22901406. Use the UMAG app to check the status of your claim by SMS.

To know the status, members have to provide the following details.

• Employment Details

• Extension code(If needed)

• Employer’s regional office

• UAN(Universal Account Number)

Conclusion

Employee Provident Fund(EPF) is one type of investment. When an employee retires, they will receive this amount. As a result, this is referred to as one type of saving that might be beneficial to members during difficult times. A member can withdraw their PF amount using the withdrawal facility while following the online or offline procedure.

Several businesses now use accounting software to manage their employees’ EPF contributions. Employers can quickly calculate the number of provident funds with the software. They also keep a record, which is useful when it comes to distributing funds to employees.

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