Many of us get easily confused when a large number of employment terminologies and salary-related information flash before our eyes. The company laws and policies, SOPs, Key Result Areas, Performance Indicators the remuneration break up, it is extremely difficult to comprehend all at once! The most complicated part is to learn about the different funds and insurances that are taken away from your basic salary. Provident Fund is a wide and popular query of every working professional. So, to make it a little easier for you here’s all you need to know about the EPF that is deducted from your monthly salary every month that you had no clue about. Mentioned below are some of the frequently asked questions pertaining to employee provident fund and their respective answers:
What Is Employee Provident Fund?
Abbreviated as EPF, this is a retirement benefit scheme applicable to all salaried working professionals. It is controlled by The Employee Provident Fund Organization (EPFO) according to which, employees contribute a part of their savings every month towards their pension/ retirement funds. So, at the time of quitting the job or taking retirement, an employee can withdraw the amount that has been saved over the years.
What Is The Applicability For EPF?
For companies having 20 employees or more, it is compulsory to register with EPFO by law. If you have a lesser workforce than a count of 20, you can also volunteer for the same.
For employees who are earning a monthly salary of less than INR 15,000 (Basic + Dearness Allowance), it becomes mandatory to get an EPF account opened by their employers. And if they are drawing a lesser amount every month, it is up to them whether they want to contribute to this fund or not.
How To Calculate EPF?
As per the latest modification, 12% of the basic salary + dearness allowance of an employee is contributed from each side, i.e., the employee and the employer. Now, 8.33% of the employer’s contribution goes into your EPS (Employee’s Pension Scheme) and the remaining 3.67% goes straight to your EPF account.
For instance, if A draws a basic salary + dearness allowance of INR 15,000 per month, INR 1,800 is deducted from his salary and the same amount is sent by his employer to his EPF account.
So, the Take Home salary of A would be [15000 – (2*1800)] = INR 11,400
How To Withdraw EPF?
Back in the day, you had to get the employer’s attestation in order to withdraw the EPF amount and it certainly created some troubles. Now, the process is just a few clicks away! To know online PF withdrawal is not rocket science anymore. You are supposed to remember the 12-digit UAN number which has apparently made the whole task easier. Now, there are two ways of doing this. One, link your Aadhaar Card to your UAN and it is done. Two, you can walk the long path of downloading Form 19, Form 31 or Form 10C from the EPF’s member portal, get the same attested by a Gazetted Officer and finally get an indemnity bond of INR 100 attached by your employer before submitting all the documents along with other verification papers to the regional EPF office. The first option seems better, No?
How To Check EPF Balance?
Since it is a government scheme, there is a EPF website namely www.epfindia.gov.in and you can register and login to the EPFO’s member login every time using the saved credentials. You need to remember your UAN (Universal Account Number) or have it handy since it is an essential and inevitable credential for checking your EPF balance or to make any other action pertaining to the provident fund.
What Are The Benefits of EPF?
Having read the entire article, it wouldn’t be necessary to mention the perks of getting an EPF account started! For record, it might annoy you that a small chunk of your salary is being deducted every month, but isn’t it for your own good? It is secretly saving money for you only anyway! Besides, who doesn’t know about the tax and insurance benefits, lifelong pension, great returns with interest and the best option of early withdrawal.