Provident Fund (PF) is a statutory deduction and is applicable to most employees (with some exceptions). According to PF rules, an employee is supposed to contribute a certain percentage of basic salary as PF. This is normally called as PF or Employee PF. Just like an employee, the employer also makes a contribution toward PF in the employee's name. This is called as Employer PF.
In most cases, the Government (PF Board) collects this amount and keeps it in the employee's name. After an employee retires, all the contribution made by the employee along with interest is paid back to the employee. This is handled by the PF Board and the employer or company has no role to play in it.
For example If my salary is Rs.1000/-, then I should contribute Rs. 120 as my PF. This will be go to my PF account. Along with my contribution, my employer shall also make a contribution of Rs. 120 in to my account. So every month, my PF account increases by Rs. 240 (120 from employee, 120 from employer).
Every employee is issued a number by the government. This number is called as the PF Number. (This is similar to a bank account number). An employee can use this number to check his current PF balance status. When an employee has served with another organization in the past, the employee may have an existing PF Number. The said PF Number can be used or a new one can be allocated. This flexibility has given rise to issues such as tracking closure of a PF account. To enable better tracking and closure, PF Board has determined in August 2014 to allocate Universal Account Number. Employee also needs to submit one of the specified identity documents for verification. Post this, employer will map PF to KYC and generate a text file for upload to PF Board. greytHR supports these additions to the PF process.
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❓FAQs - To read more FAQs about Employee Provident Fund, click here.
📃Documentation - To learn more about PF KYC, click here.
▶Video- To watch more videos on greytHR Admin portal, click here.
📢Product Update - To read about the product update, click here.