Runtime Payroll is also a complete PF software which can generate PF return in a couple of clicks. Read this guide to understand how to configure PF settings and generate PF return.
What is PF?
PF stands for Provident Fund. It is a mandatory contribution payable by employers for their employees. The amount so contributed to PF is deposited into employees’ PF account and is paid back to the employees (with interest) on their retirement and for some other specified purposes.
The provisions of PF are governed by “The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952”. It is worthwhile to note that the PF Act is applicable to all businesses in India that employ 20 or more employees.
The full text of PF Act can be downloaded from this link: https://www.epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPFAct1952.pdf
Components of PF
The PF deduction has two parts:
- Employee Contribution (12% of Basic)
- Employer Contribution (12% of Basic)
The Employer Contribution is further divided into two parts:
- PF Contribution (3.67% of Basic)
- Pension Contribution (8.33% of Basic)
Configuring PF in Runtime Payroll
Go to Setup > Statutory > PF Settings
To enable PF functionality, click ‘Enable PF Deduction’.
On this page, you also have options to specify different rates of deduction for employee and employer. Once all details are entered, click ‘Save’ to save the settings.
On second Tab ‘Salary Components’, select those components on which PF deduction is applicable. Usually PF is deductible on Basic. However, if you have more than one component which qualifies under ‘Basic’, your can select the same. Click ‘Save’ after making selections.
On third Tab ‘Locations’, select locations on which PF deduction is applicable. Usually all locations should be selected here. But in case PF is not applicable on one or more locations, you can leave that un-selected. Click ‘Save’ after making selections.
The fourth Tab ‘PF Numbers’ list down all the employees with their department and designation. In the last column, enter the PF registration number, also known as UAN. You can specify UAN for individual employee using Employee Edit page also. This page allows to enter UAN for all employees together.
Once all settings are saved, you are ready to run Payroll for a period and the PF deductions as per these settings will be automatically deducted from employees’ salaries.
Generating PF Returns
After you have successfully run payroll for a period, go to Reports > Statutory > PF Summary. Select the period using left/right arrows and click on ‘Load’ button (By default, the currently active period is pre-selected).
The summary as shown above displays Gross Wages, PF Wages, Pension Wages, Employee Contribution, Employer Contribution (PF & Pension) along-with each employee’s name and UAN.
To generate PF Return for uploading on PF website, click on ‘Export PF Return’. This will open a text file as shown below:
This file can be directly uploaded on PF portal to generate Challan and make payment of PF contribution.
To export all the displayed data in Excel for further analysis or for record keeping purposes, click on ‘Export to Excel’ and an Excel file will download.
That’s how easy it is to stay compliant with PF laws. If you have not yet tried Runtime Payroll, download a free trial for 30 days now!