Quick answerProvident fund registration is compulsory for every establishment employing 20 or more persons. The scheme was created by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and is now governed by the Code on Social Security, 2020, in force from 21 November 2025. The employer registers online with EPFO and receives an establishment code. Both employer and employee contribute 12% of wages each month, and the employer files an electronic challan-cum-return (ECR) and pays by the 15th of the following month.
- Law
- EPF Act 1952, now Code on Social Security 2020
- Threshold
- 20 or more employees
- Contribution
- 12% employer + 12% employee
- Due date
- 15th of the following month
When PF registration becomes compulsory
Coverage applies to factories and establishments that employ 20 or more persons, counting permanent, temporary, casual and probation staff, and in most cases workers engaged through contractors. Registration must be done once the headcount reaches 20, and the obligation to contribute starts from that date, not from the date you register.
Two features catch employers out:
- Coverage continues even if the number of employees later falls below 20.
- Voluntary coverage is available for smaller establishments if the employer and a majority of employees agree. Many startups opt in early because candidates expect PF.
Companies incorporated through SPICe+ receive an EPFO registration with the incorporation, but that does not mean contributions are due before the threshold is met. It does mean the code exists and should be activated correctly when the time comes.
How contributions are calculated
Contributions are calculated on wages, meaning basic pay, dearness allowance and retaining allowance. Under the Code on Social Security, the definition of wages has been widened: where excluded allowances exceed half of the total remuneration, the excess is added back to wages. Salary structures that keep basic pay artificially low should be reviewed.
| Component | Rate | Notes |
|---|
| Employee's share to EPF | 12% of wages | Deducted from salary |
| Employer's share to EPS (pension) | 8.33% of wages | Calculated on wages up to ₹15,000, so capped at ₹1,250 a month |
| Employer's share to EPF | Balance of 12% | 3.67% where wages are up to ₹15,000 |
| EDLI (insurance) | 0.50% | Paid by the employer, on wages up to ₹15,000 |
| Administrative charges | 0.50% | Paid by the employer, subject to a monthly minimum |
Employees drawing wages above ₹15,000 when they join, and who were not already PF members, can be excluded. Employers may also choose to contribute on the full wage rather than the capped amount, but once the choice is made it should be applied consistently.
Registration process
- Portal account: the employer signs up on the Shram Suvidha or EPFO unified portal with the establishment's PAN, email and mobile number.
- Application: details of the establishment, its activity, date of set-up, number of employees, the date the headcount reached 20, and the responsible persons are entered.
- Documents and signature: the constitution documents are uploaded and the application signed with the employer's digital signature.
- Code allotted: EPFO allots the establishment code online, usually within a few working days.
- Employer portal setup: authorised signatories and their DSCs are registered, and existing UANs or new UANs are linked for each employee.
There is no government fee for registration. Each employee needs a Universal Account Number (UAN) with Aadhaar, PAN and bank KYC verified; incomplete KYC is the main reason employees later face trouble with withdrawals and transfers.
Monthly ECR and ongoing compliance
Every month the employer uploads the ECR on the employer portal, listing each member's wages and contributions, generates the challan and pays online. The due date is the 15th of the following month. Other routine tasks include:
- Registering new joiners and marking exits with the correct date and reason.
- Approving KYC and transfer requests from employees.
- Ensuring contractors deposit PF for their workers, because the principal employer is liable if they do not.
- Responding to inspections and notices from EPFO.
Many establishments also need ESI registration at 10 employees and professional tax in states that levy it. We run the three together from the same payroll data.
What PF gives your employees
Explaining PF properly helps employees value it rather than see it as a salary deduction. A covered employee receives:
- Provident fund savings, the employee share and part of the employer share, earning interest at the rate declared by EPFO each year.
- Pension under the Employees' Pension Scheme, payable from age 58 to members with at least ten years of eligible service.
- Life insurance under EDLI, paid to the family if the member dies in service, currently up to ₹7 lakh, with no premium from the employee.
- Partial withdrawals for purposes such as house purchase, illness, education and marriage, subject to EPFO's conditions, and full settlement on leaving employment as the rules allow.
The UAN stays with the employee for life, and balances move with them when they change jobs, provided the employer has marked the exit correctly and the KYC is complete.
Interest, damages and inquiries
Late payment is expensive. Interest is charged at 12% a year for the period of delay, and EPFO can levy damages that rise with the length of the delay, which under the 1952 Act (Sections 7Q and 14B) ranged from 5% a year for short delays to 25% a year for delays over six months. The Code on Social Security carries similar provisions. Employee contributions deducted from salary but not deposited can also lead to prosecution.
Where EPFO believes contributions were not paid on the correct wages or for all employees, it can hold an inquiry to determine the dues (Section 7A under the old Act). Orders can be appealed to the tribunal, usually with a pre-deposit. We represent employers in these inquiries and appeals, working with your payroll records.
What PF coverage costs the business
There is no fee to register with EPFO. The real cost is the employer's share: roughly 13% of PF wages once the EDLI and administrative charges are added to the 12% contribution. For an employee whose PF wages are ₹15,000 a month, that is a little under ₹2,000 a month on top of salary. Build this into offer letters by stating whether salaries are quoted as cost to company (including the employer's PF) or as gross pay, because confusion on this point causes many disputes when employees leave.
Our professional fee for registration is a one-time amount, and monthly ECR filing is billed on the number of employees. Both are quoted in writing before we start.
Mistakes employers commonly make
- Registering late and then paying arrears with interest and damages from the date the threshold was crossed.
- Keeping basic pay too low to reduce contributions, which the wider definition of wages now catches.
- Ignoring contract workers supplied by manpower agencies.
- Wrong exit dates, which block employees' withdrawals and generate grievances.
- Not linking the employer DSC, which stops KYC approvals and transfers.
Documents you need
For PF registration we need:
- PAN of the establishment and certificate of incorporation, partnership deed or LLP agreement
- GST registration or Shops and Establishments certificate as proof of the business
- Address proof of the premises
- PAN, Aadhaar, mobile and email of the proprietor, partners or directors
- Digital signature of the authorised signatory
- Employee list with date of joining, wages, Aadhaar and bank details
- Date on which employment reached 20
How we handle it for you
Check applicability
We review your headcount, including contract staff, and the date coverage started.
Register with EPFO
We file the application on the portal and obtain the establishment code.
Onboard employees
We generate or link UANs and complete KYC for each employee.
Run monthly ECR
We prepare and file the ECR and challan before the 15th each month.
Handle notices
We respond to EPFO notices, inspections and inquiries with you.
Why clients choose ProudLegal
Advocates who appear in courtYour matter is drafted and argued by enrolled advocates, not call-centre staff.
Company and tax filings in-houseCompany secretaries and tax professionals handle registrations and returns.
Fees agreed in writingYou receive a written fee quote before any work begins.
Updates on WhatsApp and emailEvery hearing date, filing and document is shared as it happens.
Please note: this page explains the law and procedure in general terms as on 30 October 2026. Fees, limits and timelines change, and the facts of each case matter, so take advice on your own papers before acting.
Frequently asked questions
Is PF registration mandatory for less than 20 employees?
No, but it is allowed voluntarily if the employer and the majority of employees agree. Once registered, coverage continues.
What is the PF contribution rate?
12% of wages from the employee and 12% from the employer, of which 8.33% (capped on ₹15,000 of wages) goes to the pension scheme. The employer also pays EDLI and administrative charges.
What is the due date for PF payment?
The 15th of the month following the month for which wages are paid.
Is there a government fee for PF registration?
No. Registration with EPFO is free. You pay only contributions and charges once covered.
Can employees earning above ₹15,000 be excluded from PF?
Yes, if they were not PF members before joining. Existing members must continue.
What happens if PF is paid late?
EPFO charges interest at 12% a year and can levy damages that rise with the length of the delay.
Does the Code on Social Security change PF?
It replaces the 1952 Act but keeps the basic framework. The main change for most employers is the wider definition of wages.
Do I need a DSC for PF compliance?
Yes. The employer's authorised signatory needs a registered digital signature to approve KYC and transfers on the portal.
