FAQs on Employees Provident Fund (EPF) for International Worker

Table of Contents

Introduction-

EPF (Employees Provident Fund) is a welfare scheme brought into force to secure a better future for employees. It is a statutory benefit available to the employees post retirement or when they leave the services. In case of deceased employees, their dependents will be entitled for the benefits.

Under the Employees’ Provident Fund Scheme (EPF Scheme) both employers and employees have to make their contributions towards the Fund. Interest earned on the amount is credited to the member’s Provident Fund Account (PF account) and is available to the employee at the time of retirement or exit from employment as the case may be, provided certain conditions are fulfilled.

  1. Who is an International Worker (IW) as per the EPF Act?

    –  An International Worker (IW) is any employee who is a foreign national working in India under an employer registered with the EPFO or an Indian employee who is working in a foreign country with which India has a Social Security Agreement (SSA).

  2. What is a Social Security Agreement (SSA)?

    – A Social Security Agreement is a bilateral instrument to protect the social security interests of workers posted in another country. Being a reciprocal arrangement, it generally provides for equality of treatment and avoidance of double coverage.

  1. Are Indian employees deputed abroad exempted from contributing towards the Social Security Scheme of that foreign country?

    – Indian employees who are deputed abroad are exempted from contributing towards the Social Security Scheme of that foreign country, if:

    1. India has an SSA with that foreign country; and
    2. If the IW obtains a Certificate of Coverage (COC) from the EPFO.
  2. If Indian employees are deputed to a foreign country that does not have an SSA with India, would they then be obliged to contribute towards EPF?

    – Yes, in the absence of an SSA with that foreign country, the Indian employee is required to contribute towards PF in India as well as that of the foreign country.

  3. If the employee does not obtain COC from EPFO is it mandatory for them to contribute towards EPF?

    -Yes, if an Indian employee does not obtain a COC from the EPFO then he/she is required to make contributions towards PF in India as well as that of the foreign country.

  4. Are the foreign nationals exempted from making contributions towards PF?

    – Foreign nationals who are contributing towards the Social Security Scheme in their home country (country of origin), are exempted from making contributions towards the PF in India, provided that the following conditions are satisfied:

    1. India has an SSA with that foreign country; and
    2. The IW has submitted the Detachment Certificate issued by the Social Security Office of his/her country of origin.
  5. Who is a ‘Detached Worker’

    – A foreign national, contributing to the Social Security Program of the foreign country as per the Social Security Agreement signed between that country and India and exempt from making any contribution towards the Provident Fund in India for the period and terms as set out in such an agreement is a ‘Detached Worker’ for the purpose of compliance in Host Country (EPFO).

  6. In case an IW completes his/her assignment and returns to India, will he/she continue to be considered an IW?

    – No. Such employees will reacquire the status of an Indian employee upon repatriation to India after completion of their overseas assignment. Upon reacquiring the status of an Indian employee, they must contribute towards the EPF according to the provisions of the Act

  7. For an IW, what is the cap on salary up to which the contribution is made by the employer and the employee to the PF and EPS?

    – There is no cap on the salary. Contribution towards the EPF and EPS is payable on gross wages

  8. How long can an Indian employee retain the status of “International Worker”?

    – An Indian employee attains the status of “International Worker” only on account of employment in a country with which India has signed an SSA. He/she shall hold that status till the time he/she avails the benefits under a Social Security Program covered under that SSA.

Recent Updates