When PF applies
- Establishments with 20 or more employees
- Voluntary coverage is possible with fewer employees
- Once covered, the establishment stays covered even if headcount drops
When ESI applies
- Establishments with 10 or more employees in areas notified by ESIC; Greater Noida and Noida are covered
- Applies to employees with gross wages up to the ESI wage limit
- Provides medical care, sickness, maternity and injury benefits
Contribution basics
| Scheme | Employee share | Employer share | Wage base |
|---|---|---|---|
| PF | 12% | 12% (part to pension) | Basic wages and DA, subject to ceiling rules |
| ESI | 0.75% | 3.25% | Gross wages |
Rates and ceilings are set by notification and may change, including under the new Labour Codes. Confirm current figures before payroll.
Monthly routine
- Finalise payroll and compute PF and ESI for each eligible employee.
- Register new joiners: generate UAN for PF and IP number for ESI.
- Mark exits for employees who left during the month.
- Upload the PF electronic challan-cum-return (ECR) and pay.
- File the ESI monthly contribution and pay.
- Keep challans and returns with payroll records.
Common mistakes
- Late deposits, which attract interest and damages
- Excluding eligible employees or contract workers
- Splitting wages to reduce the PF base
- Not marking exits, which creates mismatches
- KYC mismatches that block employee withdrawals
Frequently asked questions
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Sources
Information is for general guidance and not a substitute for professional advice. Rules, rates and due dates change; confirm with us before acting.