What is the Employees' Provident Fund in India? Meaning, Eligibility, and Benefits – Explained

The Employees' Provident Fund (EPF) is a government-supported savings program that enables salaried professionals in India to build a financial safety net for their future. Managed by the Employees’ Provident Fund Organisation (EPFO) under the Ministry of Labour and Employment, EPF plays a vital role during retirement or emergencies by encouraging regular savings throughout an employee’s working life.

In this blog, Momentum91 walks you through all the essentials of EPF—its purpose, eligibility, contribution structure, benefits, withdrawal policies, and how to check your EPF balance.

What is the Employees' Provident Fund?

The Employees' Provident Fund (EPF) is a statutory savings scheme that helps salaried employees secure their financial future. As per Indian labour laws, both employers and employees contribute a fixed percentage of the employee’s monthly basic salary into the EPF account. Each member gets a Universal Account Number (UAN), allowing them to track their balance and transfer funds when changing jobs.

The fund earns interest over time, building up a sizable corpus by retirement. While the primary goal is post-retirement stability, EPF can also be partially accessed for urgent needs such as medical expenses, education, marriage, or home purchase.

Who is Eligible for EPF?

Employee Eligibility

• All salaried employees working in companies with 20 or more staff members are automatically eligible.
• Employees earning ₹15,000/month or less must contribute.
• Those earning more than ₹15,000/month can join voluntarily with employer consent.

Employer Registration

• Organizations with 20+ employees are legally required to register with EPFO.
• Employers must create EPF accounts for eligible staff and contribute monthly on behalf of both parties.

Exceptions

• Government staff may fall under different pension schemes.
• Small firms with under 20 employees may voluntarily opt in.
• Some businesses may run their own provident fund schemes under EPFO rules.

Documents Required for EPF Registration by Employers

Setting up EPF for your business? Here's what Momentum91 outlines as required documentation based on your business type:

For Sole Proprietorships

• Proprietor’s PAN, Aadhaar, and photo ID
• Address proof
• GST or Shop Act licence
• Bank statement or cancelled cheque
• Digital Signature Certificate (DSC)

For Partnership Firms

• PAN and Aadhaar of all partners
• Partnership deed
• Address and registration proofs
• Bank details and DSC

For LLPs

• Designated partners' PAN and Aadhaar
• Certificate of Incorporation and LLP Agreement
• Business registration proof
• Office address and DSC

For Private Limited Companies

• Directors' PAN, Aadhaar, and address proof
• MoA, AoA, and incorporation certificate
• GST or business licence
• Office address and DSC

For Trusts/Societies

• PAN and identity proof of trustees
• Registration and constitution documents
• Organisation’s address proof and DSC

Common Documents Across Entities

• First invoice (sale/purchase)
• Employee records (name, DOB, joining date, etc.)
• Salary or wage register
• Headcount and contribution logs

Step-by-Step EPF Registration Process

1. Visit the EPFO official website.
2. Click on ‘Establishment Registration’ under the ‘Services’ menu.
3. Register on the Unified Shram Suvidha Portal (USSP).
4. Fill out the ‘Employers’ Registration Form’.
5. Upload all required documents.
6. Submit the form.
7. Receive your EPF registration number post-verification.

EPF Contribution Structure

Employee Contribution

• 12% of basic salary + dearness allowance is deducted and deposited into the EPF account.

Employer Contribution

• Also 12% of the basic + DA, with:
  • 8.33% going to the Employees’ Pension Scheme (EPS)
  • 3.67% into the EPF account

Interest on EPF Contributions

The EPFO declares the interest rate annually. For FY 2023–24, it was 8.15%. Interest is calculated monthly and credited yearly:

Formula:
Interest = (Monthly closing balance × Interest Rate) ÷ 1200

👉 Always check the EPFO website for the latest rates.

Key Benefits of the Employees' Provident Fund

Retirement Savings

Employees accumulate funds throughout their career, receiving a lump sum at retirement that includes personal contributions, employer contributions, and accrued interest.

Tax Advantages

• Contributions qualify for tax deductions under Section 80C (up to ₹1.5 lakh annually).
• Interest and withdrawals after five years are tax-free.

Loan and Partial Withdrawal

EPF offers advances for:

• Housing
• Medical emergencies
• Higher education
• Marriage

These do not require repayment like regular loans.

Premature Withdrawal

Allowed under certain conditions like:

• Marriage or education
• Illness
• Buying or renovating a house
• Unemployment (over a month)

Employer Contribution

Matching contributions from the employer enhance your total savings.

Pension Entitlement

8.33% of the employer’s contribution is routed to EPS. Employees with 10+ years of service qualify for a monthly pension post-retirement.

Family Security

In the event of the employee’s death, the nominee receives the full EPF balance.

Insurance Benefit

EPF members are enrolled in the Employees’ Deposit Linked Insurance (EDLI) Scheme, which offers a life cover up to ₹7 lakh to the nominee.

EPF & EPS forms – List, purpose & who should use them

EPF Withdrawal Rules: When Can You Withdraw?

Retirement Withdrawal

Employees can withdraw the entire EPF balance once they retire at the age of 58.
A partial withdrawal is allowed after turning 55, within one year of retirement.

Job Change

Employees should not withdraw EPF when switching jobs. Withdrawing during every transition resets the 5-year tax-free service period.
Instead, use your Universal Account Number (UAN) to transfer the EPF balance to the new employer. This maintains your service continuity and tax benefits, and ensures a larger retirement corpus.

Loan Facility from EPF

EPF offers partial withdrawals that work like advances, not loans.
There’s no repayment involved; the withdrawn amount is simply deducted from your total EPF balance.

Premature Withdrawal

In specific cases, employees can make early withdrawals:

• If unemployed for over 1 month, 75% of the EPF balance can be withdrawn.
• If unemployment continues for 2 months, the remaining 25% is also eligible.
• Withdrawals are also permitted in case of illness, disability, or family emergencies.

How to Withdraw EPF: Online & Offline Methods

🖥 Online Withdrawal Method

1. Visit the EPFO Member Portal.
2. Log in with your UAN and password.
3. Go to ‘Online Services’ > ‘Claim (Form-31, 19, 10C)’.
4. Enter the last 4 digits of your bank account and verify.
5. Select the type of withdrawal (full, partial, pension, etc.).
6. Submit your claim. The amount is usually credited within 15–20 working days.

📝 Offline Withdrawal Method

1. Download and fill the required form (e.g., Form 19, Form 10C).
2. Submit it via your employer to the nearest EPFO office.
3. Attach a cancelled cheque and KYC documents.
4. The amount will be processed and transferred to your bank account.

How to Transfer Your EPF When Changing Jobs

To avoid breaking the 5-year service period and losing tax benefits, transfer your EPF using the UAN portal:

1. Log in to the EPFO portal.
2. Navigate to ‘Online Services’ > ‘One Member – One EPF Account (Transfer Request)’.
3. Fill in your old and new employer details.
4. Choose the employer (old or new) for verification.
5. Submit the request and download the acknowledgment.
6. Your employer will verify and approve the transfer digitally.

How to Check EPF Balance

📱 UMANG App

Download the UMANG app, link it with your UAN, and view your balance, claim status, and more.

🌐 EPFO Website

Log in to www.epfindia.gov.in using your UAN and password to view your passbook.

📩 SMS Service

Send an SMS:
EPFOHO UAN ENG to 7738299899 from your registered mobile number.
You’ll receive an SMS with your balance.

📞 Missed Call Service

Give a missed call to 011-22901406 from your registered number to receive your EPF balance via SMS.

🧾 Monthly Passbook Download

Log in to the EPFO portal to download your passbook, which shows detailed monthly contributions by both employee and employer.

How Momentum91 Can Help with EPF Compliance

Managing EPF compliance is complex, especially for global companies, startups, or those hiring remotely in India. That’s where Momentum91 comes in.

As an Employer of Record (EOR) and global payroll partner, Momentum91 handles:

• All employment formalities in India
• EPF and other statutory contributions
• Payroll compliance for full-time and distributed teams

This allows companies to hire in India without setting up a legal entity, while still providing all mandated benefits like EPF.

Final Takeaway

The Employees’ Provident Fund is a powerful financial tool offering more than just retirement savings. With tax savings, employer contributions, interest earnings, and flexible withdrawal options, EPF empowers employees to build long-term financial security.

Stay informed, make smart withdrawal decisions, and leverage platforms like Native Teams to manage your compliance and team expansion effortlessly in India.