Basics of Employee Provident Fund

Provident fund scheme Act 1952 is one of the main savings platforms in India, employees who are working in both private and government sector organisations. Provident fund will be calculated based on employee basic salary and dearness allowance, in case of private organisations there is no dearness allowance.

Every organization with 20 or more employees should register under EPFO.

The provident fund ceiling threshold limit has been increased to Rs.15,000 from Rs.6500. Vide notification dated on 22.08.2014 Ministry of Labour and Employment has been increased.

1. Employee’s PF contribution (Basic + DA) 12%

2. Employer’s PF contribution (Basic + DA) 13%

Employer’s contribution goes to different heads

EPF A/c No.1 = 3.67%

PF Admin charges A/c No.2 = 0.5%

EPS Contribution A/c No.10 = 8.33%

EDLI Contribution A/c No.21 = 0.5%

How to upload PF return

Fill the all employees PF details in separate excel file

File save as in CSV format in same PF return folder

Close the CSV file

Right click on CSV file and open in notepad

Do changes in notepad : 1. Delete extra rows and headings 2.Replace with #~#

Save as notepad file in PF return folder

After login you will find the ECR option in menu bar click on that and you will find different options, click on ECR upload option.

Click on ECR upload and select wage for the month it means for which month return you want to upload and upload the text file by clicking on browse and click on submit.

If your text file has been uploaded correctly then summary sheet will appear, here you can check the PF calculation details.

Before submitting ECR file you have to enter additional details regarding EDLI and EPF/EDLI admin and inspection charges.

Click on Submit ECR

PF Related Accounting Entries

Salaries account A/c Dr

To PF employee’s contribution A/c

To ESI employee’s contribution A/c

To Professional Tax A/c

To TDS A/c

To Salaries Payable A/c

PF Payment Entry

PF employee’s contribution A/c (12%) Dr

PF Employer’s contribution A/c (13%) Dr

To Bank A/c

Employee CTC Breakup

Basic salary

House rent allowance

Conveyance allowance

Medical allowance

LTA

Other special allowance

Employer PF contribution

Variable Pay

Employer ESI contribution