What is EPF Payment?
EPF is considered to be one of the most ideal retirement funds introduced by the Ministry of Labour wherein both the employer and employee contribute 12% of the employee's salary (Basic wages + DA + Retaining allowance) equally. Only the registered employees and employers can contribute to this fund. The interest received on the total accumulated amount (after 5 Year) is tax-free. According to the Provident Fund Act, every organization which has employed 20 or more individuals (both permanent or contractual) are required to register under the PF Act mandatorily.
Both employers and employees must contribute to the PF account. Since September 2015, all registered employers are required to make these payments online. Employers can make EPF payments either through the official EPF website or via their bank's website if the service is available.
How to make EPF Payment Online?
The government of India has made it mandatory for all companies and organizations to make the payment of provident funds online. The online payment can be made through the EPFO website or through any of the bank’s websites, which are authorized and the employer should also have an account or net banking service of the same bank.
The list of banks which have a tie-up with EPFO are mentioned below:
- Axis Bank
- State Bank of Bikaner and Jaipur
- Bank of Baroda
- State Bank of Hyderabad
- Bank of India
- State Bank of India
- Bank of Maharashtra
- State Bank of Mysore
- BNP Paribas
- State Bank of Patiala
- Canara Bank
- State Bank of Travancore
- Catholic Syrian Bank
- 35 Syndicate Bank
- City Union Bank
- UCO Bank
- Corporation Bank
- Union Bank of India
- Cosmos Bank
- United Bank of India
- Deutsche Bank
- Vijaya Bank
- Development Credit Bank
- Allahabad Bank
- Federal Bank
- Andhra Bank
- HDFC Bank Limited
- Bank of Bahrain and Kuwait
- ICICI Bank Limited
- Central Bank of India
- Indian Overseas Bank
- Dena Bank
- Jammu and Kashmir Bank
- Dhanlaxmi Bank
- Janta Sahkari Bank
- IDBI Bank
- Karur Vysya Bank
- Indian Bank
- Kotak bank
- IndusInd bank
- Lakshmi Vilas Bank
- ING Vysya Bank
- Oriental Bank of Commerce
- Karnataka Bank
- Punjab & Maharashtra Coop. Bank
- RBS (The Royal Bank of Scotland)
- Punjab and Sind Bank
- Saraswat Bank
- Punjab National Bank
- Standard Chartered Bank
- Ratnakar Bank
- Tamilnad Mercantile Bank
- Shamrao Vithal Co-op. Bank
- TNSC Bank
- South Indian Bank Ltd
- YES Bank
What steps should be followed to make EPF Payment Online and generate online receipt?
- Login to the EPFO portal, using the Electronic Challan cum Return (ECR) credentials. [https://unifiedportal-emp.epfindia.gov.in/epfo/]
- Review the details like the Establishment ID, Exemption status, Name, Address, Status, etc are correct.
- Click on the ‘Payment’ option from the dropdown menu and choose the ‘ECR Upload’ option.
- Upload the ECR text file post selecting the ‘Wage Month’, ‘Salary Disbursal Rate’ and ‘Rate of Contribution’.
- If all the predefined conditions are met, then the uploaded ECR will get validated.
- If there is a validation error, then the individual will be asked to correct their ECR text file and they will have to upload it again.
- The TRRN will be displayed on the screen, the individual needs to click on the ‘Verify option’.
- Click on the ‘Prepare Challan’ option and generate the ECR summary sheet.
- Click on ‘Generate Challan’, post entering the admin charges.
- Click on the ‘Finalize’ tab post verifying the challan amount.
- Against the relevant TRRN, click on ‘Pay’ option.
- Choose the ‘Online’ mode of payment and choose the bank from the dropdown menu from which you wish to pay.
- On the successful payment you will receive your transaction ID and electronic payment slip.
- The final transaction status will be updated on the EPFO page and the individual will receive a confirmation against the payment made.
What are the Benefits of Contributing to EPF?
Here are the various benefits of contributing a portion of the salary to EPF -
- Tax Benefits: Employee contributions are tax-deductible under Section 80C, and the interest earned is tax-free. Withdrawals are allowed after five years of continuous service, except in case of termination.
- Pension Guarantee: Employers contribute 8.33% of salaries to the Employees’ Pension Scheme (EPS), ensuring a lifetime pension after 10 years of contributions.
- Insurance: The EDLI Scheme provides a lump-sum payout to nominees if an employee passes away during service.
- Partial Withdrawal: Members can withdraw funds after 5–10 years for specific needs like medical treatment, home loan repayment, or unemployment.
- Stable Returns: EPF funds are invested in government securities, debt instruments, and ETFs, offering steady growth with lower risk.
- Death Benefits: The accumulated EPF balance is transferred to the nominee in the event of the employee’s death.
Penalty for Late EPF Payment
Interest on Late Payment (Section 7Q):
Employers are charged an annual interest of 12% for failing to deposit EPF contributions before the due date.
Penalty on Late Payment (Section 14B):
- 5% per annum for delays up to 2 months
- 10% per annum for delays of 2–4 months
- 15% per annum for delays of 4–6 months
- 25% per annum for delays exceeding 6 months
Note: The penalty amount cannot exceed the total arrears.
Now that you know how to make EPF payments online on the EPFO portal, you must also know that the contribution of the employee to the EPF is eligible for deduction under section 80C. So make sure you claim the deduction while filing your ITR for FY24-25.
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