EPF (Employees' Provident Fund) Compliance Checklist

Under Section 1(3) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, every establishment employing 20 or more persons must register with the Employees' Provident Fund Organization (EPFO) within one month of reaching the threshold. Voluntary coverage is available for establishments with fewer than 20 employees.

Apply for registration on the EPFO Unified Portal (unifiedportal-emp.epfindia.gov.in) by submitting Form 5A (Return of Ownership) along with the PAN, incorporation certificate, and a list of employees. The EPFO allots a unique Establishment Code upon approval.

Every employee earning basic wages plus dearness allowance up to INR 15,000 per month is mandatorily covered. Generate a Universal Account Number (UAN) for each employee through the Unified Portal and link it to their Aadhaar, PAN, and bank account.

PF contributions are computed on basic wages, dearness allowance, and retaining allowance. Ensure payroll configurations correctly include these components and exclude allowances like HRA, bonus, or overtime pay, in line with the Supreme Court judgment in Surya Roshni Ltd. and the EPFO circular on allowances.

Employees drawing basic wages plus DA above INR 15,000 may be enrolled with mutual consent (para 26(6) of the EPF Scheme). Once enrolled, the member must continue contributions even if wages later exceed the ceiling, unless exempted by the RPFC.

The employee contributes 12% of basic wages plus DA to the EPF account. The employer contributes 12%, of which 8.33% is diverted to the Employees' Pension Scheme (EPS) subject to a pension wage ceiling of INR 15,000, and 3.67% goes to EPF. EDLI contribution of 0.50% is payable by the employer.

Under para 38 of the EPF Scheme, 1952, the employer must remit both employer and employee shares by the 15th of the month following the wage month. For example, March wages contributions are due by 15 April. Payment is made via the EPFO's online TRRN (Transaction Reference Number) system.

Upload the monthly ECR file containing member-wise wage and contribution data on the Unified Portal. Verify member details, mark any exits or new joiners, generate the challan, and complete payment through an authorised bank.

In addition to PF and pension contributions, the employer must remit administrative charges at 0.50% of EPF wages (minimum INR 500 per month) and EDLI insurance charges at 0.50% of wages. These are included in the ECR and paid along with contributions.

Late payment attracts interest at 12% per annum under Section 7Q and penal damages under Section 14B ranging from 5% to 25% per annum depending on the period of delay. Persistent default can also lead to prosecution under Section 14 of the Act.

The wage register maintained under the EPF Scheme must reconcile with ECR uploads. Any discrepancy between the payroll wage register and ECR data can trigger compliance notices from the EPFO during enforcement visits.

Ensure each employee's UAN is activated and linked with Aadhaar (mandatory since 01-Jun-2021 per Section 142 of the Code on Social Security, 2020, made effective via notification), PAN, and bank account details. KYC seeding enables auto-settlement and online claims.

When an employee joins from another EPF-covered establishment, initiate an online transfer claim (Form 13) on the Unified Portal to consolidate the previous PF balance under the same UAN. This should be processed within 30 days of joining.

Mark the Date of Exit and reason (resignation, termination, superannuation, death) on the Unified Portal for each separating employee. This enables the member to file online withdrawal or pension claims without employer intervention.

International workers (employees holding foreign passports working in India or Indian employees working in countries without a Social Security Agreement) are covered under the EPF Act without any wage ceiling. Maintain Form IW-1 and ensure full-wage contributions.

Though ECR filing has largely replaced manual annual returns, employers must ensure that the consolidated annual data on the Unified Portal reflects correct member-wise contributions for the financial year. Download and verify the annual statement of accounts for each member.

The statutory auditor typically verifies PF compliance. Ensure that the P&L charge for employer PF matches ECR remittances and that no arrears are outstanding. Any shortfall or excess should be reconciled before the audit is finalised.

Enforcement Officers from the EPFO may conduct periodic inspections under Section 13 and issue observations or assessment orders under Section 7A. Respond within the time granted (usually 15 days) with supporting wage registers, ECR records, and bank statements.

Under para 35A of the EPF Scheme, maintain all contribution cards, ECR receipts, wage registers, and member records for a minimum of 6 years after the date of last contribution. Records may be maintained electronically provided they are retrievable for inspection.

The Employees' Deposit-Linked Insurance Scheme, 1976 provides life insurance benefit up to INR 7 lakh to nominees of a member who dies while in service. The employer contribution of 0.50% on PF wages funds this scheme. No employee contribution is required.

The Employees' Pension Scheme, 1995 applies to members who joined EPF before age 58. The employer's pension contribution is 8.33% of wages capped at INR 15,000. Ensure Form 10D (pension claim) references are available for retiring employees.

For international workers from countries with which India has a Social Security Agreement (e.g., Belgium, Germany, France), issue a Certificate of Coverage. For workers from non-SSA countries, contribute on full wages without the INR 15,000 ceiling.

Encourage employees to file or update Form 2 (Nomination and Declaration) online through the Member Portal for EPF and EDLI benefits. Nominations should be updated upon marriage, birth of a child, or death of a nominee.