Employee’s Provident Fund (EPF) & ESI
Employees Provident Fund (EPF) is a scheme controlled by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. PF registration is applicable for all establishment which employs 20 or more persons. Under EPF scheme, an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer. The employee gets a total amount including self and employer’s contribution with interest, on retirement or resignation.
It is obligatory that employees’ drawing less than Rs 15,000 per month, to become members of the EPF. As per the guidelines in EPF, employee, whose ‘basic pay’ is more than Rs. 15,000 per month.
Amount of PF Contribution
The PF contribution paid by the employer is 12% of (basic salary + dearness allowance + retaining allowance). An equal contribution is payable by the employee. In case of establishments which engage less than 20 employees or meet certain other conditions, as per the EPFO rules, the contribution rate for both employee and the employer is restricted to 10%. For most employees working in the private sector, it’s the basic salary on which the contribution is calculated.
Employees Pension Scheme
Out of employers’ contribution, 8.33% will be routed to Employees’ Pension Scheme, which is calculated at Rs 15,000. The amount routed to EPS would be Rs. 1250 for employees whose basic pay amounts to Rs 15,000 or more. However, if the basic pay is less than Rs 15000, then 8.33% of such amount would be routed to EPS, the balance will be retained in the EPF scheme. On superannuation, the employee would receive the full share plus the balance of employer’s share reserved for his credit in EPF account.
Due Date for filling
The employee portion and employer portion are payable to the EPFO, within 15 days of the close of every month.
ESI was applicable for factories that employed ten or more persons. Subsequently, the coverage of ESI scheme has been expanded. any establishment employing ten or more persons drawing wages of upto Rs.21,000 per month must obtain ESI registration.
Number of Employees Required for ESI Registration
To determine the coverage of a factory or an establishment under ESI, the following categories of persons are to be counted in addition to the persons directly employed:
- Persons on the roll of a factory, who are on leave with or without wages.
- A substitute or badli worker employed for wages.
- Directors who are on the pay roll of a company.
- Persons drawing over Rs.21000 per month as wages, but not coverable otherwise.
- Persons employed by, or through a contractor and working under the direct supervision of the employer.
Benefits of ESI Registration for Employee
- Medical Benefit
- Sickness Benefit
- Maternity Benefit
- Disablement Benefit
- Dependant Benefit
- Funeral Expenses
- Unemployment Allowance