EPF and ESIC Compliance are mandatory schemes for commercial units with a certain employee threshold. EPF requires a 12% contribution from both employer and employee, while ESIC mandates 75% salary contribution from employees and 4.75% from employers.
Meaning and Applicability
Understanding Mandatory Reporting Obligations for Employers
EPF and ESIC are the two compulsory options that should be incorporated in the commercial units having employees more than a threshold limit, who are working for them. Once such employers enroll under these schemes, they are to comply certain mandatory reporting liabilities per FY to stay legally protected.
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EPF
This scheme is applicable under the guidelines of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 as prescribed by Employees’ Provident Fund Organization (EPFO).
Mandatory registration for all the companies/organizations that is 3 years old having employee strength more than 20. Voluntary registration is accepted for the units having less number of employees.
Both employer and employee contribute in equal amount in this scheme.
In case, the employee number is more than 20, the contribution amount is 12% of Basic + DA. In case, employee number is less the contribution amount is 10% of Basic + DA.
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ESIC
This scheme is applicable under ESI Act, 1948, as prescribed by Employees’ State Insurance Corporation (ESIC) under Ministry of Labour and Employment.
Mandatory registration for the establishments/units/factories having 10 employees receiving INR 15,000 p.m. income within 15 days
75% of the salary contribution from the employee and 4.75% from the employer should be made under this scheme (Except those employees earning INR 100 per day)
EPF and ESIC Compliance : Essential Employer Obligations
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For EPF
- Eligible employer should clear the Provident Fund payment in Provident Fund Account through Challan as opened during registration on 15th of each month.
- Provide details of new joiners (Form 5) and terminated employees (Form 10). Employer should also provide information on last month employees, new and resigned employees within 15 days
- Consolidated monthly Statement (Form 12 A)
- Annual Return by 30th April of every year, with consolidated annual contribution statement (Form 3A and 6A)
- Conduct PF Audit, as applicable under the guidelines of this Scheme
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For ESIC
- Eligible employer should clear the Monthly contribution in the ESIC Account through Challan as opened during registration on 15th of each month
- Provide details of new joiners and terminated employees. Employer should also provide information on last month employees, new and resigned employees within 15 days
- Bi-Annual Returns (Form 5) as follows: –
April to September: 11th November
October to March: 11th May - Immediately report about accident/Death case (Form 16), wherever applicable
- Conduct ESIC Audit, as applicable under the guidelines of this Scheme
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Our Methodology
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Penalties on Late Payment
- For EPF
Penalty of 12% per year interest for each day of delay in payment of contribution
Sr. No. Delay up to Penalty on Late Payment 1 2 Months 5% interest p. a 2 2-4 Months 10% interest p.a 3 4-6 Months 15% interest p.a 4 More than 6 Months 25% interest p.a. not exceeding 100% at a time - For ESIC
Penalty of 12% per year interest for each day of delay in payment of contribution
