The employer has the responsibility of paying EPF contributions for each employee under its employment.
Steps to be followed when sending Contributions and Member Contributions Details
- Assign EPF membership numbers for employees in numerical order. Any member number that had been previously assigned to a particular member should not be allocated to a new employee under any circumstances.
- Include the National Identity Card (NIC) numbers of Sri Lankan employees when forwarding member contribution details.
- Calculate the contribution for each employee as mentioned below.
Calculation of the Total Contribution
Employee’s Contribution: A minimum of 8% of the total monthly earnings (To be deducted from the employee’s salary/wage) Employer’s Contribution: A minimum amount equivalent to 12% of total monthly earnings of the employee (To be paid totally by the employer) Total Contribution per Employee: 20% of the employee’s total monthly earnings (as defined below).
Total Earnings per Employee
Total earnings should include the following.
- Salary, wages or fees
- Cost of living allowances, special living allowances and other similar allowances
- Payment with respect to holidays
- The cash value of cooked or uncooked food supplied by the employer to the employee (Determination of such value will eventually be made by the Commissioner of Labour)
- Food allowances
- Any kind of remuneration that may be specified
- Payments in the form of discounts (Commissions) piece rate payments and contract basis payments
- The Total EPF amount (a minimum of 20%) should be remitted to the Superintendent of EPF, EPF Department, No. 13, Sir Baron Jayathilake Mawatha, Colombo 01 or P.O. Box 1299, Colombo 01, Sri Lanka.
- EPF contributions with regard to a particular month should be received to EPF on or before the last working day of the following succeeding month. Otherwise, surcharges will be imposed against the employer according to the delay.
- Send the member contribution details along with the contribution payment.
- Mode of payment and method of forwarding member contribution details:
- As per the EPF (Amendment) Act No. 02 of 2012, every employer having in his employment a minimum of fifty employees is required to submit the EPF Returns (Employee Contribution Detail Reports) monthly by electronic means.
- Accordingly, other employers are permitted to provide paper-based submissions of contribution details through Form “C”.
- However, providing contribution details electronically and make the respective payments online is recommended) (even for the employers having its’ employees below 50) since it is much benefited for all the stakeholders of the EPF.
1. E – Return System (Electronic Filing)
The following steps are to be followed for paying contribution via the e-Return system.
- Register e-Return system by submitting the Registration Form provided by EPF, directly to the EPF or through Licensed Commercial Bank(LCBs) in Sri Lanka that facilitates the payment of EPF contributions and submission of contribution details through online banking systems for their EPF paying customers.
- ReregistertheemployeeswithEPF according to their details appeared intheNationalIdentityCards.
- Prepare the following text files as per the formats given by EPF/LCBs that facilitates their EPF paying customers through online banking facility;
a. Contribution Detail File:
This file provides the details of employees and their monthly contributions. All details of Sri Lankan employees should be duly filled as per their National Identity Cards (NIC) or as per Passport details, in case of a foreigner.
Contribution Detail File
b. Payment Summary File
This file provides the details of the monthly contributions paid for the period specified in the respective Contribution Detail File.
Payment Summary File
- Check the accuracy of the created text files with the assistance of EPF/LCBs be for e-submitting to the EPF.
- Submit e-Returns(text files) through one of the following ways.
a. Online Banking Systems of LCBs:
Submit contribution details through online banking systems of LCBs. Currently, this facility is available with;
- Bankof Ceylon – i-Net System
- Commercial Bank of Ceylon PLC–COM BANK PAYMASTER System
- DFCC Bank – EPF System of DFCC
- Hatton National Bank PLC-PAYFAST System
- NDB Bank –NDB EPF System
- People’s Bank – EPF Netsystem
- Sampath Bank PLC – Vishwa Corporate System
- Seylan Bank – Seylan Bank EPF System
b. E-mail System:
Submit contribution and payment details to EPF through epfC3@cbsl.lk.
- Remit the monthly contributions to the EPF through one of the following modes.
This facility is available for the employers who submit their e-Returns through online banking facilities of LCBs specified under (vi-a). Employers are facilitated to pay the EPF contributions directly through the online banking facilities of LCBs after uploading the respective contribution detail files to the system, successfully.
Submit the Direct Debit Authorization Form certified by the employer’s bank to the EPF. This authorizes EPF to claim the respective funds at the end of each month from the employer’s bank. Both contribution detail and payment detail files should be submitted to the EPF through e-mail, within a minimum of five days before the last working day of the month. Employers must assure to provide sufficient amount of funds in their bank account enabling the EPF to claim the amount of funds in the contribution detail file on the last working day of the month.
Direct Debit Authorization Form
(Please note that this facility is provided only for the employers who are having more than 50 employees in their employments)
2. Paper Based Submission (Manual System)
- Employers having less than 50 employees have to fill the Form “C” in triplicate which can be obtained (free of charge) from the nearest Labour Office or can be downloaded from the EPF website to send the first contribution of all employees.
Download Form C
- Use the pre-printed Form “C” which will be sent by the EPF to the employer by post monthly to send contribution details
- When a new Employee is recruited, employee’s details should be included in Form “C” of the particular month. Member details should be duly filled as per the National Identity Card (NIC) of the new member.
(The original copy of the Form “C” should be submitted to the Department of EPF and the second copy should be forwarded to the nearest Labour Office. The third copy should be kept with the employer for the future reference).
- Remit contributions to the EPF through one of the following mode of payment.
- EPF remittances through cash or cheque are accepted at all branches of the People’s Bank.
- Dully fill the EPF payment cheque or cash slip which could be obtained at the People’s Bank.
- Each EPF payment cheque/cash deposit slip should be submitted along with the Form “C” which includes a reference number issued by the Department of EPF for the specific month.
- The reference number (Ref. No.) which is printed below the employer address in the Form “C”, should be written down in the particular area of the FPF cheque / Cash deposit slip.
- Employer has to submit duly completed From “C” which consists of the reference number along with EPF cheque/ cash slip to the People’s Bank Branch.
- Cheques and bank drafts should be drawn in favour of the Superintendent of Employee’s Provident Fund.
- Cash payments could be made at the Bank of Ceylon ‘Thaprobane Branch’.
- Money Orders (Paying Office should be indicated as ‘Colombo’)
(Post the original Form “C” with the instrument of payment (cheque/ money order/ bank draft/ cash slip of Bank of Ceylon) to the Superintendent of EPF, Lloyd’s Building, No. 13, Sir Baron Jayathilake Mawatha, Colombo 01 or handover it to the document collection counter of the Department of EPF at the Lloyd’s Building).
- EPF remittances through cash or cheque are accepted at all branches of the People’s Bank.
- If there are discrepancies the member details or payment, such member accounts are not updated and informed to the employers.
- 2% surcharge on the total payment will be imposed for submitting incomplete details (Form “C”, Text files)
- Contributions which are sent without Form “C” or text files are not entered to the members’ accounts and will lead to complications and penalties.
- Employer has to respond to the letters received from the EPF in order to update member accounts by complying to the following steps.
- Have to Pay 2% surcharge
- Have to re submit complete Form “C” or text file
- Have to pay the underpayment
- Make sure to confirm the acceptance or inform any discrepancies of member’s details
- Written request for changing the period of contribution, the details of payment or the employer details should be forwarded to the EPF.
- At the time of sending the FIRST Form “C” employers are advised to attach a copy of Employer Registration Certificate issued by the Department of Labour.
- Send the copy of Employer Registration Certificate along with the contribution details to the EPF in the case of receiving a letter allocating “Z” numbers (Temporary employer number).
- Sending through Electronic Media is encouraged for all organizations as manual data entry may lead to difficulties.
Penalties & Offences
The due date for paying the current month’s contribution is on or before the last working day of the subsequent month. If not, a surcharge will be imposed against the employer according to the delay by the Department of Labour.
Surcharges will be added for:
- Late submission of contributions
- Under payments
(When the amount paid is less than the calculated contribution, a surcharge will be added according to the number of days from the under payment, to the full payment)
Surcharge for overdue payments and under payments
|Period of delay||Surcharge Rate|
|01 days – 10 days||5%|
|11 days – 01 months||15%|
|01 months – 03 months||20%|
|03 months – 06 months||30%|
|06 months – 12 months||40%|
|More than 12 months||50%|
Legal Action on Default Employers
- In the event of under payment or non-payment of contributions, the employee reserves the right to make a written complaint to the Commissioner of the Labour. On the receipt of the complaint and after proper investigation, the employer will be informed and warned to pay the dues.
- If the employer does not fully cooperate and pay the contributions after three warnings, the Labour Department will be forced to take legal action against the employer to safeguard the rights of the employee.