ESI / EPF

The Employee Provident Fund is a saving plan for the retirement age. In India, EPF is to be provided by the employer to his entire salaried workforce. Every month, the regular fixed interest amount is paid to the employee.

Employee Provident Fund works as a perk to the employees on top of their basic compensation

  • Risks are covered: The most primary advantage of the EPF registration is that you can cover the monetary risks of your employees along with their dependents that might occur owing to retirement, ill-health or their disease.
  • One person, one account: another key benefit is that the PF account that it’s firm and movable. It may be easily carried forward by your employee at another place of employment.
  • Achieving Long-term objective: Numerous long-term aims such as children’s wedding or their upper education that have need of the critical availability of finances. Now, here the accrued PF amount will prove useful on such occurrences.
  • Crisis management: Moreover, certain unexpected circus.
  • Covered pension: With the exception of the 12% contribution of employees to their EPF account, 12% amount is also added by his employer. Now in this, 8.33% amount goes in the Employee Pension Scheme (EPS) account.

 

EPF registration for the Employer will be obligatory if only:-

  • He runs a factory with 20 workers or more
  • Any other association/institution having 20 or more staff
  • The group of such associations for whom the Union Government may vide a notification would denote a necessary EPF registration.
 
 
Contribution:-

Each and every month, the employers having ESI registration are supposed to add 3.25 % and the employees need to add 0.75% of the salary towards their ESI account.

Hence, the sum total of the regular ESI contributions by the Employer as well as Employees comes out to be i.e. 4%, which goes towards the ESIC fund.