Are you availing the maximum EPF benefits?

There are 2 EPF incentives schemes launched by the Government of India the former - The Pradhan Mantri Rojgar Protsahan Yojana(PMRPY) and recently announced incentive under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). But are you still paying EPF and EPS for your employees? In the Budget Speech 2016-17, it was stated that “In order to incentivize creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. This will incentivize the employers to recruit unemployed persons and also to bring into the books the informal employees. In order to channelize this intervention towards the target group of semi-skilled and unskilled workers, the scheme will be applicable to those with salary up to Rs 15,000 per month. I have made a budget provision of Rs 1,000 crore for this scheme.”

Later, this was amended to include employer’s full contribution of EPF and EPS w.e.f. 01/04/2018 for a period of 3 years to new employees and to the existing beneficiaries for the remaining period of 3 years through EPFO. The terminal date for registration of beneficiary through establishment is 31st March, 2019.

But what does this mean to employers? Are all employees eligible? Are all organisations eligible to avail this benefit? Below are the key points to consider:
1. New employee is defined as an employee earning less than (and including) Rs. 15000 per month, who was not working in any establishment registered with the EPFO in the past and did not have a Universal Account Number prior to 01st April, 2016.
2. The Universal Account Number of the employee is to be Aadhaar seeded.
3. Establishments registered with the Employees’ Provident Fund Organisation (EPFO) should also have a Labour Identification Number (LIN) allotted to them under the Shram Suvidha Portal.
4. The employers get the 12% contribution (8.33% till 31.03.2018) paid by the Government for these eligible new employees from the date of acquiring a new UAN or 09.08.2016, whichever is later, provided they continue in employment in any EPFO registered establishment. To clarify, if such new employee changes his job to a new establishment, the new establishment can avail of the scheme benefits by registering this employee in the PMRPY Portal for the balance period.

On 10th April 2020, the Scheme under Pradhan Mantri Garib Kalyan Yojana (PMGKY) for the upfront benefit to the Employers having employment up to 100 and whose 90% of the employees were getting wages less than 15000 was issued. Under this scheme, entire EPF and EPS contribution of employee and employer will be paid by the Government for eligible employers and employees.
Besides the above, other important factors to consider:

1. System will calculate the maximum dues and if amount paid is more, it will not allow benefit. (Say for example for wages 10000 if amount of 12% shown is 1210 instead of 1200, no benefit)
2. In case the UAN is not validated against Aadhar, system will not give the benefit.
3. Benefit will be given, if eligible, only against the First ECR. Once an ECR is uploaded, second ECR will not be considered for benefit.
4. For employees earning over Rs.15,000/- EPF wages (Gross less HRA), employee and employer contribution is lowered to 10% from 12% till August 2020. Making sense of the above 2 schemes:

While number of employees or their wages is predetermined, what we can do the least to get maximum possible benefits is to ensure:
1. Returns are filed in time
2. All UANs are seeding against Aadhar
3. There are no errors in returns
4. We have made the right registrations with the departments to get maximum benefits.
And final incentive only for female employees… As per the 2018-19 Union Budget, new women employees could contribute only 8% (instead of 12%) towards their EPF account for the first three years of employment.

Popcorn Infotech is helping is customers comply with all Government norms and also avail maximum benefits. If you have any queries or need our assistance, please feel free to call on our 24x7 helpline number 8767003366 or write to us on

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