Every ETF Detail You Need to Consider for Your Small Business’s Employees

About ETF

The ETF Board was established under Act No-46 of 1980 and currently operates under the Ministry of Finance, Economy, and Policy Development; with the main objective of providing non-contributory welfare benefits to its members. All public sector employees who are not entitled to the Govt. Pension Scheme and all private sector employees are members of this Fund while their employers are required to remit 3% of the gross earnings of their employees to the Fund, monthly. Unlike in EPF, only the employer makes a contribution on behalf of the employee/member or in other words is a non-contributory benefit to the member.

At present there are 9 schemes in operation providing benefits to its members. These benefits are granted irrespective of the balance in the members account and also no deductions are made from their accounts for the benefits paid while the members account is credited with the full interest and dividend declared by the Fund each year. 

Let’s get started! Similar to EPF, your first order of business is to get registered under the fund as an employer.

Registration of Employer

An employer first becomes liable under the provisions of the ETF Act to contribute to the Fund as soon as they recruit any employee. 

Unlike EPF, the ETF has no registration procedure prior to making contributions.

The first and foremost obligation of any employer who has started a business and recruited his 1 st employee is to register the business with the Commissioner General of Labour and obtain a registration number for the employment.

On receipt of the Registration Number from the Labour Department the employer must either write or personally call over at the ETF Office and obtain the relevant forms and instructions to make payments to the ETF.

Once the 1 st contribution is received at the ETF Board that employer will be entered in the “Contributing Employers List” in the ETF.

Employers who are contributing to approved Provident Funds are given separate Numbers from the ETF. Such employers should quote that Number in all monthly remittance forms, half yearly returns and other correspondences.

The ETF does not have a separate registration system. Therefore, the ETF is also using the employers EPF registration number for their payment and other activities. The new employers who have not obtained an EPF number can obtain a temporary number from the Contribution/Collection Section of the ETF for their payments until they get the EPF registration number from the Labour Department.

How to calculate ETF

Unlike EPF the employers should not deduct the ETF contributions from employees earnings.  The Employer must calculate 3% of ETF contributions on the employees total monthly earnings.  The total monthly earnings should include the following :

1. Salary, Wages or Fees
2. Cost of Living allowance, Special Living allowance and other similar allowances
3. Payment with respect of to holidays
4. The cash value of cooked or uncooked food supplied by the employer to the employee (The determination of such values will eventually be made by the Government of Labour)
5. Food allowance
6. Any other kinds of remuneration that may be specified
7. Payments in the form of discounts (commissions), piece-rate payments and contract basis payments

Remittance of ETF contributions

It is the responsibility of the employer to both process and remit the contributions for ETF. Before moving onto process of remittance it is important to know that there are two types of employers in the ETF. The process slightly differs according to the category you belong in. 

1. Larger category (employers employing more than 15 employees)
2. Smaller category (Employers employing less than 15 employees)

Larger category

You belong to the larger category if you employ more than 15 employees. Here, you will be remitting contributions and must submit duly filled  “R1” remittance form with the Cheque, Money Order or Cash payment. If you started by paying contributions using Form R1 should never use Remittance form R4 even if the number of employees falls below 15.

In addition, larger category employers has to complete and submit another form half yearly named form II. Due dates for this form are as follows

• Form II for the 1st half (January to June) – due on or before the end of August 
• Form II for the 2nd half (July to December)- due on or before the end of February of the following year

Smaller category

You belong to the smaller category if you employ less than 15 employees and you must submit a duly filled “R4” remittance form with the cheque,  Money Order  or Cash payment.

It is important to note that, In case, where it is necessary to change the Remittance Form from R4 to R1, due to an increase in the number of employees to more than 15, it is essential that such change should commence either in January or July. The Board should be informed in advance of a change of Remittance Form. (Telephone No. 011 2581704 Ext. 623)

In all R1/R4 Remittance Forms, Employer’s signature, Telephone Number & e-mail

address (if any) should be entered. Any information added in all of these forms should tally with the Remittance Forms submitted every month.

Once you identify which category your organisation belongs to, you can choose to remit your payments either online or Manually. 

Manual Mode(Payments by Cheques/Money Orders/Cash)

All payments should be made along with a duly filled Advice of Remittance ( R1 or R4 Form ) in duplicate.The duplicate copy of the form would be returned to the Employer by the ETF Boardin acknowledgement of the remittance.

All cheques/Bank drafts must be crossed and payable to “Employees’ Trust Fund Board”. Payments by money Orders should be made favoring “Employees’ Trust Fund Board”. Paying office to be indicated as “General Post Office”.

Payments by cheques or money orders may be made to the ETF Head Office at Narahenpita,ETF office at ColomboFort and to the regional offices at Gampaha, Kandy, Matara,Kurunegala, Galle, Ratnapura, Anuradhapura, Kalutara, Hatton, Badulla, Kegalle,Hambantota & Ampara.

Payments by cash are accepted only at the Bank of Ceylon- Torrington Square branch,Bank of Ceylon – Super Grade Branch at Pettah, and People’s Bank – Narahenpita branch.

Amount in the cheque or money order should tally with the total amount indicated in the Remittance Form.

A separate remittance form should be used for each month in respect of payments of arrears. If not so, please attach a separate schedule indicating the breakdown of the total amount.

Electronic Mode (Payments through Internet)

ETF Board has introduced on-line payment scheme, since it is the most convenient and quick payment system.

Through Internet, Employers are able to pay Contributions&Surcharges to the ETF Board and upload contribution details of the members, 24 hours of any day irrespectiveof a bank holiday from their own office or from any remote location.

At present this facility is available for the account holders of Bank of Ceylon, People’s Bank, Commercial Bank of Ceylon, Hatton National Bank, Sampath Bank and National Development Bank.

Please contact the following officers and register with ETF e-banking scheme.

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BANK OF CEYLON

PEOPLE’S BANK

COMMERCIAL BANK OF CEYLON PLC

SAMPATH BANK

HATTON NATIONAL BANK PLC

NATIONAL DEVELOPMENT BANK

The file format of the magnetic media file to upload the Form II/ R4(Member details) through the Internet are given in the Form II /R4 member datafile format details. Prior to make the payments please obtain details about uploading of member contributions from Manager (Member Accounts – Larger Category) of ETF Board on 011-2369596

In case of surcharge payments, entering of Surcharge Notice number is mandatory.

Please obtain a receipt from the computer as an acknowledgement. Receipts are not issued by theETF Board for payments made through the Internet.

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