Navigating EPF Registration for Startups: Can Anyone Explain the Process?

Dear All,

We are a startup company engaged in CAD outsourcing work. As per the new EPF guidelines, we need to register with EPF. Can anyone brief me about the EPF registration formalities?

Waiting for your reply.

Regards,
Binu

Dear Binu,

Recently, a new amendment has been implemented in the PF Department. Organizations where more than 10 employees are working are also covered under the PF Act.

You should obtain the "PROFORMA FOR COVERAGE" Application from your regional PF Office, fill out the application, and enclose the following documents: Labour Registration copy, Employees Details (name, father's name, date of birth, date of joining), wage register copy, PAN card copy, payment cheque, Article of Memorandum (as per Companies Act), and submit them to your Regional PF Office.

Payment calculation should be done as follows:
- Calculate on BASIC+DA
- 12% employee PF contribution
- 3.67% employer PF contribution
- 8.33% pension contribution (maximum ceiling of 541/-)
- 0.5% EDLI Charges
- 1.1% Admin Charges
- 0.1% inspection charges

Regards,
Srinivas B

Dear Sir,

How many forms are required in a death case and what are the necessary requirements for the case?

OK.

With best regards,
Kumer Singh

Dear Srinivas,

We are also a startup company, but regarding PF, I heard that for the first 3 years EPF is not applicable, I mean PF registration is not required. Please, anybody, correct me if I am wrong and provide me full details regarding EPF & ESI.

Thanks in advance.

Regards, Shanti

Dear Friends,

It is a great topic to know about. Thanks for posting, which has helped in gathering useful information. Well, friends, I was told by one of the PF enforcement officers that the rule of the number of employees is still not applicable.

Binamol: I don't think we need to pay an amount when we get registered for PF. After getting registered, you need to submit the above-mentioned details by Srinivas in Form-5.

Kumer Singh: According to me, you have 3 forms for death claims - Form 20, Form 10-D, and Form 5-IF. All three can be obtained from the PF website www.epfindia.com.

Regards,
Amith R.

Amith,

Your second sentence is not clear to me. Can you please explain it in detail? The headcount of one of our sister concern 'ADVENSER' is 19. We were planning to start the PF Scheme when the headcount reaches 20 (as per the rule). Since the EPF guideline has been revised, we need to register with EPFO at the earliest. Please guide me.

Regards,
Binu

Dear Mr. Kumer Singh,

"Death claim" means any member of the EPF Organization has expired. The nominee of that person, such as family members (wife, children, father, mother), can claim and withdraw the deceased person's contribution amount. The dependents receive a lifelong pension according to the 1995 Pension Scheme, and they receive an amount of 60,000/- under the EDLI Insurance Scheme.

At that time, they should submit Form 20, Form 10D, and Form 5F. Along with these applications, they have to provide the death certificate, family members' certificate, and three passport-size photographs with the employer's signature.

Regards,
Srinivas B

Dear Mr. Binu,

You are required to make the payment along with the application. Please make the cheque payable to the "Regional Provident Fund Commissioner" and mention your local PF Office.

Regards,

Srinivas B

Dear Binu,

To make it simple, just gather all the required details about your establishment and visit your local PF office. You can get your doubts clarified about the same.

Let me make it clear that the PF department will certainly not penalize you for a delay in registration for at least a few days since the amendment has happened very recently. On the other side, your establishment will be covered from when it becomes effective. So, be prepared to get registered, but don't rush too much. All the best.

Regards,
Amith R.

Dear All,

I need to ask a question regarding EPF registration. How mandatory is it for an organization with an employee strength greater than or equal to 20 to have EPF Registration?

We are a group of IT consultants registered as a private limited company, and all employees draw a salary of around 2.4 Lakhs per annum. I was discussing with someone, and he advised that all employees with a salary greater than Rs. 6,000 per month can sign a declaration stating that they don't need PF deductions. In this case, the employer also does not need to add their contribution, but maintaining certain documents will satisfy the statutory requirements of EPFO. Is this true?

I have no knowledge of Indian Labor and Industrial Relations laws, so please guide me.

Thanks in advance.

Regards,
VG

Strictly speaking, the PF Act is not applicable to software companies. Please read the applicability clause of the act. The recent recommendations for amendment have not been passed. So, for the time being, it is not applicable, i.e., the present rules will follow, i.e., 20 or more persons, and the maximum salary for the contributions is 6500. Since it is an employee welfare legislation, it is good to have coverage under the act. The documents submitted for the same are already mentioned by our friend Binu.

Dear Srinivas,

I would like to inform you that once you have 20 personnel in your muster (now it will change to 10, but notification is pending), you should apply for registration. As for the contribution amount, you need to submit relevant documents such as a list of employees, the registration certificate of the firm, bank statements, etc. (as outlined in the coverage performa). You must also submit a bank draft for P.F. contribution to the department to complete the allotment procedure from your end.

Regards,
Shrvan

Hi,

There is a small correction to the calculation. It should be as follows:
When calculating employee PF, it will be 12% of the basic salary, and for employers, it will be 13.61%. The breakdown of 13.16% is as follows:
- 3.67% employer PF contribution
- 8.33% pension contribution (with a maximum ceiling of 541/-)
- 0.5% EDLI Charges
- 1.1% Admin Charges
- 0.01% inspection charges

I hope this clarification is correct.

Venkat

Dear Friends,

If the employee's basic salary is above Rs. 6500, how should we make the contribution?

Waiting for your reply at the earliest.

Regards,
Binu

Dear Binu,

You can either make them opt out of PF if they really don't want PF to be deducted, or you can consider the basic as Rs 6500 from day one and deduct PF from day 1 on Rs 6500 only, i.e., Rs 780. Hope now it is clear for you.

Regards,
Amith R.

Dear Amith,

Thanks a lot.

One more thing I want to ask you is about the PF calculation. Is it necessary that we should consider DA for PF calculation along with basic? Here we don't have DA in our salary structure.

Regards,
Binu

Hi friends, this is Kumar working as an HR executive. I have a doubt: if I join a new company, what is the procedure to apply and get the company code number, and what forms do we need to submit? Kindly help me.

Regards,
Kumar

Hi Binumol,

Please visit this website www.epfindia.com.

Then click on "Registration" on the left-hand side. You can download the "proforma for coverage." All other information is also available here.

Regards,
Priya J.

Hi Binumol,

Please visit this website www.epfindia.com. Then click on "Registration" on the left-hand side. You can download the "proforma for coverage." The rest of the information is also available here.

Regards,
Priya J.

Dear Vaibhav,

In my opinion, being an IT company will not exclude your company from the coverage of the EPF Act. It is quite correct that the applicability clause of the Act does not specify the "IT Industries" in the list of notified industries for coverage of the Act. However, the EPF Department covers such types of companies under the ambit of "Expert Services". Even many big IT companies like Wipro, Infosys, etc., are either covered under the EPF Act or have their own EPF Trust. Had they followed the same rule, they too would have been out of the EPF net after all. Who wants to increase their input cost?

Now, as per the EPF Act, an establishment having the employee strength of 20 employees (including employees employed through a contractor like security guards, housekeeping staff, or all other hired staff) is required to be covered under the EPF Act. Now for the purpose of EPF contribution, the employees' Basic+DA salary structure is to be taken into account. In case an employee is drawing gross annual wages of Rs. 2.4 lakhs but his Basic+DA is less than 6500/- per month (not Rs. 6000/- as per your friend), then he'll be compulsorily required to be a member of the EPF Scheme. It is only when, and it's available for the first time only, when an employee's Basic Salary including DA is more than Rs. 6500/- per month, then he can, as per his wish, as your friend suggested, remain out of the bound of the EPF Coverage until he draws a Basic Salary of more than the ceiling (as per Para 2(f)(ii) of the EPF Scheme).

Now in your case, even if all 20 employees are drawing (Basic) wages of more than Rs. 6500/- per month and even if all of them opt out of coverage of the EPF Act. I'd, as an EPF/ESI Consultant, advise you to get your company registered under the EPF Act from the first date when the employee strength of your company, including contractor employees, exceeded 20 in order to avoid any legal hassle later on. Because it'll not be a very complicated/lengthy process. Furthermore, as a tool of retirement benefit, if the employees of your company opt for coverage under the Act, they can save their hard-earned money.

In case none of your employees are under EPF coverage and you have been covered under the EPF Act and have been issued the Code Number, all you'll be required to do is to deposit Rs. 7/- through a Bank Challan and file one copy of the challan with the EPF Dept through the monthly Return of contribution and deposit a NIL Annual Return of contribution. You'll also be required to maintain a register of members, called an eligibility register, wherein you'll have to mention the names of all employees even if they are not members of the EPF Scheme with other particulars (except EPF Account Numbers and the date of EPF membership). You'll be required to get a declaration from the employees regarding their wish to be enrolled as a member of the EPF Scheme and also Form-11. And that's it.

I have tried to provide you with a detailed answer to your query. In case there still remains anything that needs clarification, you can either post it here or write to me at epf.consultants@gmail.com.

Dear all,

Kindly let me know how to become an HR consultant. I want to start working as an HR consultant, so please provide me with the complete procedure to engage with clients.

Thanks & Regards,
Minesh Kumar

Yes, you have to make a Demand Draft for Rs. 3000 (There is no fixed amount; it will be considered as security/advance payment and will be adjusted in the next contribution) in favor of "SBI A/c EPF."

Thanks,
Sunny

There are three ways in which the PF Act can be made applicable to a concern:

1. Automatic coverage: employing 20 (10 as per recent amendment) or more employees, including factories.
2. Coverage by CG: where automatic coverage is not applicable and the CG wants to make the Act applicable, it may do so by giving at least 2 months notice in the official gazette.
3. Voluntary applicability: fewer than the statutory minimum number of employees but the employer and the majority of employees agree to make the Act applicable through an application to the CPFC.

Dear Minkoo,

If we opt out of EPF, will our company face any legal complications in the long run?

Regards,
Binu

Dear Srinivas,

Hi, this is Rafiq. I have recently joined a pathological company in Bangalore. The head office is located in Hyderabad. We are expanding in Bangalore. My query is, now I want to take separate EPF & ESI codes for employees. Is it necessary to take the code or not? Please, can you clarify this for me?

I am waiting for your response.

Dear Binu,

Thank you for the information. Could you please provide the implementation date of EPF Registration for firms with 10 or more employees? I couldn't find the amendment on the EPF website. Kindly provide the notification along with the effective date if possible.

Thanks & Regards,
Sujatha

Dear All,

We are a start-up company doing CAD outsourcing work. As per the new EPF guidelines, we need to register in EPF. Can anyone brief about the EPF registration formalities?

Regarding EPF Registration, the following documents are required for deciding the final date of coverage under EPF:

1. Shops & establishment Registration
2. Partnership Deed (In case of Partnership or Proprietorship Owner)
3. PAN number of the firm
4. Copy of P.Tax Registration
5. Details of Gala Purchase (e.g., copy of agreement)
6. First electricity bill
7. First sale bill / Purchase bill
8. Salary wages registers and attendance register since the beginning
9. Month-wise strength of the number of employees since the beginning
10. List of partners/owners along with their residential addresses
11. Name of the bankers, address of the bank, and the name of the person responsible for financial affairs
12. Balance sheet / P&L accounts
13. Letterheads (20)

If you have any queries, please contact me on 9892727246.

Warm Regards,
Deepak Shinde

Dear,

As per your requirement regarding EPF Registration, the following documents are required for deciding the final date of coverage under EPF:

1. Shops & establishment Registration
2. Partnership Deed (In case of Partnership or Proprietorship Owner)
3. PAN Number of the firm
4. Copy of P.Tax Registration
5. Details of Gala Purchase (e.g., copy of agreement)
6. 1st electricity Bill
7. 1st sale Bill/Purchase Bill
8. Salary wages registers & attendance register since the beginning
9. Month-wise strength of the number of employees since the beginning
10. List of partners/owners along with their residential addresses
11. Name of the Bankers, address of the bank, and the name of the person responsible for financial affairs
12. Balance sheet / P&L accounts
13. Letterheads (20)

If you have any queries, please contact me at 9892727246.

Warm Regards,
Deepak Shinde

Hi Mr. Rafiq,

You do not need to take one more registration. Both are central Acts. For PF, you can pay anywhere in India (depends on your payroll process), and for ESI, you can take a subcode.

Regards,
Srinivas B

Hi Rafiq,

I have recently joined a pathological company in Bangalore. The head office is located in Hyderabad. We are expanding in Bangalore. My query is whether I need to take separate EPF and ESI codes for employees. Is it necessary to take the codes or not? Please can you clarify this for me.

I am waiting for your response.

Dear Sujatha,

I think EPF authorities have not updated the new guidelines on their website. Please see the below newsletter which I received from Naukri:

[EPF Approved For Businesses With Ten Or More Employees]

In a significant decision, the government has approved the proposal to bring businesses with ten or more employees under the realm of the Employees' Provident Fund (EPF). Previously, the limit was twenty or more workers. There has been no decision on revising the rate of interest of the EPF corpus fund for the year 2008-09. Under the new decision, any business with ten or more employees will have to deduct EPF and make a matching contribution.

Source: 05-07-08 PTI - Press Trust of India
Compiled by www.naukri.com

Regards,
Binu

Dear All,

I also have a similar doubt. In the case of a manufacturing unit, when should we go for PF registration? Should we do it during the construction phase, or should we wait for production to start? Please guide me as it is urgent. We have around 140 employees on our payroll but have not done PF registration yet as we are still under construction, and production is expected to start in 4-6 months. Please provide guidance.

Regards,

Hi Binu,

As per the law, you are required to register under the PF & Misc. Act only when your total strength crosses 19, i.e., 20 or more until today. The amendment of 10 persons is passed in the EPFO board meeting and still has to pass in the Parliament, and hopefully, it will take effect from Nov/Dec '08. In the sister concern, you have 19 employees right now; one more recruitment will compel you to register. If you have 19 or fewer employees and still want to register, you can get voluntary coverage. I think the confusion over the number of persons is over now.

You are required to deposit a draft in favor of SBI A/C EPF along with your application for coverage.

I am a company consultant covering the Gurgaon-Delhi region. If you want more information, you can contact me at 09810395907 or email me at paulpriyabrata@gmail.com.

Thanks,
P.B. Paul

A good compilation. In the following message, the ceiling of salary is missing. You must pay PF on a salary of Rs. 6500/- per month. If the salary is more, you may restrict PF payment to Rs. 6500/- or you may pay on the full salary.

In the case of EDLI, you may pay to the PF organization or take a policy offered by the Life Insurance Corporation.

Regds, AG Desai

You must pay PF on a salary of Rs. 6500 per month. If the salary is more, you may restrict PF payment to Rs. 6500 or you may pay on the full salary.

In the case of EDLI, you may pay to the PF organization or take a policy offered by the Life Insurance Corporation.

Regards,
AG Desai

Dear Sir,

Our company is registered under the Companies Act in Chennai. We also have branches in Andhra Pradesh. Recently, we received a notice from the EPF enforcement officer regarding EPF registration for one of the Andhra Pradesh branches. So, I kindly request you to inform me where we should register EPF, whether in Andhra Pradesh or in Chennai.

Thank you,
Prabhakar Reddy

Hi, please explain it once again in layman's terms as I did not understand.

My company has 19 employees. According to the new laws, PF contributions have to be made if the number of employees is 10 or more. Now, I need to start the formalities to get my company registered for the same.

Please explain how I can go about doing this. What is the procedure, and where do I need to go to get these things done? How long will it take for me to enroll my company under this act?

Please reply. Thank you.

EPFO and ESIC Registration Guidance

Recently, I established an HR Consultancy that will provide manpower to various sectors. Currently, I do not have any staff, but it will gradually start depending on the workload. I want to know how I can register with EPFO and ESIC for employee welfare. Please guide me and provide me with full details. Is it possible to register online or not?

Regards,
Imran

Can anyone please tell me how to register an employee under PF when he enters his duty for the first time?

Hi, I just joined a startup firm as an Asst. HR Manager in Kerala. The firm was started two and a half years ago. They have not registered under PF and ESI yet. Could you please tell me whether there is any clause stating that startup companies are exempted from registering under PF and ESI for the initial 3 years? What is the minimum number of employees required for registration under the PF/ESI act?

Hi, I am Resmi.

Please let me know whether trainees who are getting paid as a stipend are eligible for PF/ESI. What is the time limit for a startup company to register under EPF/ESIC?

Regards,
Resmi

Already, you mentioned that your firm started 2 and a half years ago and inquired about how to avail of startup benefits. You need to register for both ESI (if you have employed 10 or more employees) and EPF (if you have employed 20 or more employees).