Employee Provident Fund as the name suggests is an account under which a saving contribution is made for a salaried employee on a monthly basis. The said saving amount is deducted from the salary of the employee and is either a fixed amount of Rs. 1800% or 12% of the basic salary.
Employee Provident Fund registration is mandatory for all companies having a total strength of 20 employees or above. Any Company having more than 20 employees in India must register for the Employee Provident Fund. Upon recruitment of any employee, the company needs to either open an EPF account of the employee or take credentials of the existing account of the employee. The company or government sector undertaking thus needs to deduct a certain amount from the salary of the employee and deposit in the EPF account. An equal contribution is also made by the Company or Employer.
It is compulsory to open EPF account for an employee having a salary of less than Rs. 15000/- per month. However, it is not compulsory to open the Employee Provident Fund account for an employee having a salary above Rs. 15,000 per month, but it is at the discretion of the employer to do so. Most companies give this facility to all their employees irrespective of their salary bracket.
If EPF registration is done by a company and in the future, the number of employees decreases to less than 20, it is mandatory for the Employer or Company to continue the contribution to the EPF account.
There are following benefits of EMPLOYEE PROVIDENT FUND scheme