How Can Small IT Firms Implement PF Benefits with Less Than 25 Employees?

I am working with a small IT firm, with an employee strength of approximately 20. I want to add the PF facility for personnel benefits in the company. How can I add this variable to the salary (meaning by procedure)? I have received information that a minimum of 25 employees is required to add this variable to the salary. Is this correct? If not, then how many minimum employees are required for PF deduction in the company? What should be the percentage?

Kindly provide your valuable feedback.

Dear Concerned,

Once you reach an employee strength of 20, it becomes mandatory to register for PF. However, you may also apply for PF registration even if your strength is less than 20. It is essential to remember that when adding this variable to the salary, PF registration must be completed. By exploring this website, you will find numerous posts on how to register for PF, details on various challans, and the rates of remittances.

The employer should get the factory or establishment registered with the ESI Corporation within 15 days of the applicability of the ESI Act. The declaration of registration is to be filled in Form 01, along with a separate sheet containing the name and address of the establishment, number of employees, nature of duty, and the name, designation, and address of the manager controlling such persons, in respect of the office situated outside. After being satisfied with the application, the ESI regional office will allot a code number to the employer. After that, only can you register your employees with the ESI. They have to fill out a declaration form Form 1, clearly stating Male or Female. All declaration forms should be countersigned by the employer. Then prepare a return of declaration in Form 3 separately for Male & Female within 10 days of filling the declaration form. Then, every employee shall be allotted a temporary identification number.

For PF formalities, the company must be 3 years old. After that, only it can be registered with the PF department. Even for this act, the minimum number of employees should be 20. Every employer of an establishment to which the Employee Provident Fund Act applies should submit in Form 5A (in duplicate) to the commissioner, particulars of all the branches and departments, owners, directors, partners if any, or any other person who is controlling its affairs within 15 days of the scheme's applicability. Upon receipt of Form 5A, the commissioner shall verify the particulars submitted and, after being satisfied, shall allot an Establishment Code No.

I hope it is clear to you now.

Regards,
Manoj S

Coverage:
• For establishments employing 20 or more persons, it is mandatory to register under PF.
• Co-operative Societies employing 50 or more persons.
An establishment continues to be covered under the Act, irrespective of the fall in the employment strength.

Contributions:
The statutory rate of contribution is 12% of emoluments (basic wages, dearness allowance, cash value of food concession, and retaining allowances if any).
Only in a few cases like the brick, beedi, jute, and coir industry, the contribution rate is 10%.
A matching contribution is to be collected from the emoluments of the employees.
Out of the 12% of the employer's share of contribution, 8.33% is to be remitted towards the pension fund.
The employer is also required to pay a contribution of 0.5% of the emoluments towards EDLI.

Dear All HR,

As per the Employees' Provident Fund Act of 1952, if a company has 20 or more workers employed, the provisions of the Act regarding Provident Fund (PF) are applicable.