What is the Employee Provident Fund (EPF)?
The employee provident fund of the EPF is a facility that has been provided by the Indian government for employees with the aim of providing some sort of a social security structure. The scheme is governed by the Employees' Provident Fund Organisation or EPFO. The organisation is a statutory body of the Government of India and also provides for pension schemes and insurance products for its members.
How does EPF work?
The employee provident fund scheme works on the basis of contributions received from the employee and the employer. It also pays interest on the amount accumulated in the fund and can be withdrawn by the employee without the having to pay it back.
EPF Account: The Employee Provident Fund account has to be opened by employers if they have more than 20 employees. Once created, employees can check their account online to check the balances and make withdrawals. It also comes with the new UAN (Universal Account Number) that is meant to make it easy to transfer the account in case the employee changes jobs or opts out of EPF to switch to some other provident fund scheme.
Employee Contribution: The contributions for employees is a minimum of 12% of the monthly basic salary. If the employee is getting a dearness allowance and retaining allowances then these too will be included before calculating the EPF contributions. Employees are also free to contribute more than 12% towards the EPF.
Employer Contribution: The contribution made by employers is again a minimum of 12% of the monthly basic salary (including allowances like dearness and retaining allowance) of the employee. However, the employers share is split between EPF, pension fund, EDLIS and administration charges. The lion’s share of the employer’s contribution goes to the pension scheme, 8.33% in fact.
Interest rates on EPF: the interest rate paid on the provident funds is decided by the central government. It is currently 8.75% per annum but can change if the government decides to increase or reduce it.
How to check EPF Balance:Employees can check the balance of the Employee Provident Fund online. The procedure for the two is explained below.
Checking EPF balance online:
If the employer has uploaded the Electronic Challan Cum Return for the employee then they can check their passbooks online. However the facility is only available to those for whom the employer has uploaded the challan for the period of May 2012 onwards. To be able to check the balance online, first employees need to register themselves.
To register online, you’ll need your mobile number and an ID proof. This ID proof can be the PAN’s, Aadhar cards, driver’s licences or passports.
Once the registration is done follow these steps:
Step 1: Go to the member’s area on the EPFO website.
Step 2: Click on the “Download E Passbook” option.
Step 3: On the page that shows, select your state. (Eg Karnataka, Punjab etc.)
Step 4: Select your EPF office.
Step 5: Enter the EPF account number, type in the character shown for verification and click on “GET PIN”
Step 6: You will now receive an SMS with the authorisation pin. Enter that on the same page, check the I Agree box and click on “Get Details”
Once you click on the get details button your EPF passbook will be shown to you.
Checking EPF balance Via SMS
To get the balance of the EPF account all you have to do is to follow these steps.
Step 1: Go to the EPFO website.
Step 2: On the homepage will be an option to checkEPF balance online. Click on that.
Step 3: You will now see a page where it says “click here to know the balance”. Click on it.
Step 4: The next page will ask you to select a PF State. Choose whichever state is applicable for you. Example, Maharashtra, Karnataka, Delhi, etc.
Step 5: Now enter your EPF account number, name (as per the EPF account) and the mobile number.
Step 6: Check the “I Agree” box and click on “Submit”
Once you click on submit, and if the information provided is accurate, the system will send an SMS to the registered mobile number with the details about the current balance in the EPF account.
Is the EPF mandatory for all employees?
No. The EPF is mandatory only for those who draw less than Rs. 6,500 a month as a basic salary. For those who draw more than that, EPF is optional.
Can I check the balance if no deposits have been made for 3 years?
Yes, even if no transactions have been carried out for the last 36 months you can still check your balance. However you will have to submit a special request in such a case.
Do I need to create an account on the EPFO site?
No. All you need to do is register yourself using a mobile number and a valid ID proof. This reduces the headaches of having to remember passwords and login ids.
What if my employer does not offer EPF?
If you work for an establishment that employs 20 or more people then it must register itself with the EPFO and offer EPF facilities. You can ask your employer for it.
When can I withdraw the entire amount in my EPF?
You can withdraw the entire amount in your EPF once you reach the age of 55 years or if you have been without a job for 6 months.