Last reviewed: 25 September 2026. PF and ESIC registrations are less about PDFs and more about clean data: the entity’s identity set, and an employee master accurate enough to generate UANs and IPs without a correction season. Since 21 November 2025, both schemes run under the Code on Social Security, 2020, one of the four labour codes that replaced the EPF Act, 1952 and the ESI Act, 1948. The portals and forms are familiar, but the wage base has changed. Here is what each portal wants, the rates and ceilings, a worked payroll example, and the first-month setup that keeps the 15th-of-month cycle painless.
Entity documents (both portals)
- PAN of establishment; COI/deed as applicable
- Address proof of establishment (the standard chain)
- Bank proof (cancelled cheque)
- DSC of the authorised signatory (registration and returns lean on it)
- Specimen signature/authorisation where formats ask
The employee master (where quality decides everything)
| Field | Why precision matters |
|---|---|
| Name exactly per Aadhaar | UAN/IP generation validates against Aadhaar — variants create orphan records |
| Aadhaar, PAN, mobile, bank of each employee | KYC seeding now saves claim-time misery later |
| Date of joining and wages split | Coverage and contribution math start here |
| Nominee details | Statutory forms want them; collecting at onboarding is painless |
| Nationality and passport details | Foreign nationals are handled differently for PF (see international workers below) |
Rates and ceilings
| Item | PF (EPFO) | ESI (ESIC) |
|---|---|---|
| Establishment threshold | 20 or more employees | 10 or more persons; one employee in a notified hazardous occupation |
| Employee wage ceiling | Rs 15,000 a month of basic plus DA for mandatory membership | Rs 21,000 a month for coverage |
| Employee contribution | 12% of wages (10% for certain notified establishments) | 0.75% of wages |
| Employer contribution | 12%, of which 8.33% (on wages up to Rs 15,000) goes to the pension scheme; plus 0.5% EDLI and admin charges | 3.25% of wages |
| Payment | By the 15th of the following month, through the ECR | By the 15th of the following month |
| Late payment | Interest under section 127 and damages under section 128 of the Code (old sections 7Q and 14B of the EPF Act) | Interest and damages under the same sections, as the ESI regulations specify |
Worked example: the 50% wage rule on a Rs 30,000 salary
Section 2(88) of the Code defines wages as basic pay, dearness allowance and retaining allowance. Listed exclusions such as HRA, conveyance, overtime and commission may not exceed 50% of total remuneration; anything above 50% is added back to wages. Take an employee paid Rs 30,000 a month:
| Component | Monthly | Treatment |
|---|---|---|
| Basic + DA | Rs 12,000 | Wages |
| HRA | Rs 12,000 | Excluded |
| Conveyance allowance | Rs 3,000 | Excluded |
| Commission | Rs 3,000 | Excluded |
| Total remuneration | Rs 30,000 | Exclusions of Rs 18,000 are 60%, against a 50% cap of Rs 15,000 |
| Wages under the Code | Rs 15,000 | Rs 12,000 + Rs 3,000 added back |
PF was earlier computed on basic of Rs 12,000: Rs 1,440 from the employee and Rs 1,440 from the employer. On Code wages of Rs 15,000 it becomes Rs 1,800 each. The employer's Rs 1,800 splits into Rs 1,250 for the pension scheme (8.33% of Rs 15,000) and Rs 550 for the provident fund, plus Rs 75 EDLI. The extra Rs 720 a month in combined contributions comes out of the same Rs 30,000 cost unless the CTC is revised. For ESIC, a second employee on Rs 18,000 gross pays Rs 135 (0.75%) and the employer Rs 585 (3.25%). ESIC has traditionally computed contributions on gross wages, so confirm how your payroll software reads the Code definition for ESI before the next cycle.
International workers and Social Security Agreements
Indian subsidiaries of foreign groups often second expatriates from the parent. Paragraph 83 of the EPF Scheme treats a foreign national working for an Indian establishment as an international worker: PF applies from the first day, on the full salary, without the Rs 15,000 ceiling. The exception is an employee from a country with a Social Security Agreement with India who holds a certificate of coverage from the home-country authority; that employee stays in the home scheme. The Karnataka High Court struck down paragraph 83 in Stone Hill Education Foundation v. Union of India (April 2024), so the position differs by state and should be checked before a secondment starts. Collect the certificate of coverage before the first payroll, not after the EPFO asks. For expatriate payroll, secondment agreements and parent recharges, see our foreign subsidiary accounting and FEMA service.
First-month setup checklist
- Registration codes obtained and portal logins secured to a monitored email
- UANs generated/linked (prior UANs carried over, not duplicated)
- Salary structure mapped to the section 2(88) wage definition, with the 50% test run for every employee (see the employer guide)
- Foreign nationals flagged, with certificates of coverage on file where claimed
- Contribution calendar: compute → ECR → pay by the 15th, owner named
Frequently asked questions
At what headcount do these registrations trigger?
Under the First Schedule to the Code on Social Security, 2020, PF applies to every establishment with 20 or more employees and ESI to every establishment with 10 or more persons (other than a seasonal factory), and to a single employee in a notified hazardous occupation. Individual employees are covered for ESI while their wages are within Rs 21,000 a month; PF membership is mandatory up to Rs 15,000 of basic plus DA.
Can we register before crossing thresholds?
Voluntary coverage exists and some clients demand it contractually — a deliberate choice with ongoing cost; decide it, don’t drift into it.
Employees already have UANs from old jobs. New ones?
No — link existing UANs; duplicates create transfer-and-claim knots that take months to untie.
Which wages do contributions apply to?
Wages as defined in section 2(88) of the Code on Social Security, 2020: basic pay, dearness allowance and retaining allowance. Excluded items such as HRA, conveyance, overtime and commission may not exceed 50% of total remuneration; any excess is added back to wages. A low-basic structure therefore no longer keeps the PF base low.
What if an employee refuses ESIC deduction?
Coverage is statutory within the wage ceiling — consent is not the test. Communication helps; the law decides.
Are contractors/interns counted?
Coverage tests look at working reality and principal-employer chains — labels alone protect no one; the memo answers your actual arrangement.
First return due when?
Contribution cycles run monthly with payment by the 15th of the following month — the first month’s calendar discipline sets the tone for every month after.
Penalties for late start?
Delayed registration invites retrospective contributions with interest and damages. Under the Code on Social Security, section 127 charges simple interest at the notified rate from the due date, and section 128 allows damages of up to the amount of arrears, levied as the PF schemes and ESI regulations specify. Curing a gap voluntarily is far cheaper than an assessment.
Does PF apply to foreign nationals working in our Indian company?
Under paragraph 83 of the EPF Scheme, foreign nationals working for an Indian establishment are international workers, covered from day one on their full salary without the Rs 15,000 ceiling, unless their home country has a Social Security Agreement with India and they hold a certificate of coverage. The Karnataka High Court struck down paragraph 83 in Stone Hill Education Foundation (April 2024), so check the current position for your state before deciding.
When did the Code on Social Security take effect?
The four labour codes, including the Code on Social Security, 2020, took effect on 21 November 2025, replacing laws such as the EPF Act, 1952 and the ESI Act, 1948.
We register both codes, build the employee master to KYC standard, and install the monthly ECR cycle with a named owner.
PF & ESIC ComplianceLabour LawRequest a Scope DiscussionThis article is a general educational summary as on 25 September 2026 and is not professional advice or an assurance of any approval, registration or outcome — departmental decisions rest with the authorities on each case’s facts. Requirements change; verify current rules or discuss your specific case before acting.