EPF / ETF Registration
Registration with the Department of Labor is a must in order to obtain a registration number from the Employees Provident Fund (EPF). The fund is a government body, regulated under the central bank. No separate registration is needed to register with the Employees Trust Fund (ETF). Registration with the EPF automatically registers a company with the ETF too. The same number is used for monthly contributions.
Companies are required to pay gratuities too for employees who had been employed for five years or more. This regulation doesn’t apply, if the staff is lesser than 15. Pension schemes don’t apply for private sector employees.
Businesses operating in dangerous activities are required to obtain a special factory’s ordinance checkup.
Registration of Members
An employee is entitled to membership at the EPF/ETF from the day of his/her appointment. It’s a legal responsibility of the employer to enroll employees to the EPF fund, on the flip side, employees are also responsible to talk in their employers to do so.
Is there an eligibility criterion?
Absolutely Not!
- Irrespective of the nature of employment, all employees should be enrolled, regardless of whether, they are permanent, temporary, apprentice, casual, or shift workers.
- All forms of employment, whatever the basis is, be it piece rate, contract, commission, work performed, each and every form of employee is eligible for the membership.
Employees Provident Fund “E-Return System”
In accordance with the EPF (amendment) Act No. 2 of 2012 and regulations gazetted in May 2013. It’s mandatory for employers with 50 or more employees to submit the EPF member details and contributions on a monthly basis through an electronic return system.
EPF has initiated an EPF E-Return System, an absolute paperless solution for employers to send in their EPF returns.
Under this method, employers are requested to submit 2 text files in accordance with the specified format, free of all forms of forms and paper.
Employees’ Trust Fund “Electronic Mode”
ETF Board of Sri Lanka has introduced an online payment scheme since it is the most convenient and the fastest payment system.
Employees Provident Fund “Penalties & Offences”
The deadline for the current month’s contribution will be before the final working day of the following month. In case of default, CBSL will prepare a default list indicating the amounts defaulted.
Penalties will apply for:
Late submission of contributions
The list of defaulters together with the surcharge rising from 5% to 50% on the amounts overdue will be sent to the Labour Department by the CBSL. The surcharges imposed will be notified to the employer by the Labour Department.
Underpayments
Partly made payments, or any amount paid less than the calculated contribution, will be calculated against the exact amount payable, and there on wards, an appropriate penalty will be added to the calculated unpaid amount, followed by a penalty for each pending day before the full payment is made.
The table below depicts the EPF penalty amount charges in percentages in case of default or underpayment
| Delay | Surcharge % |
|---|---|
| 1 day and up to 10 days | 5% |
| 10 days and up to 1 month | 15% |
| 1 month and up to 3 months | 20% |
| 3 months and up to 6 months | 30% |
| 6 months and up to 12 months | 40% |
| Over 12 months | 50% |
Employees Trust Fund Penalties / Surcharges
- For delayed returns (Form II)
Employers who are inclined to contribute to the ETF under the remittance form “RI” are expected to provide half yearly return, incorporating information of their contributions, referring to each month under the remittance form “RI” is as follows:- 1st half-year return (January to June) on or before 31st August of the same year
- 2nd half-year return (July to December) on or before 28th February of the following year.
- In case of late payments, the surcharges will apply as follows:
| For delayed payments | Surcharge payable on the contribution |
|---|---|
| For a delay not exceeding 10 days | 5% |
| For a delay between 11 days to 01 month | 15% |
| For a delay between 01 to 03 months | 20% |
| For a delay between 03 to 06 months | 30% |
| For a delay between 06 to 12 months | 40% |
| For a delay exceeding 12 months | 50% |
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