PF and ESI Compliance
India's mandatory employee social security contributions: Provident Fund (PF) under EPFO and Employee State Insurance (ESI) under ESIC, both calculated and deducted through payroll.
Provident Fund (PF) and Employee State Insurance (ESI) are the two primary statutory contributions that Indian employers must manage through payroll. PF is governed by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Employers contribute 12% of the employee's basic salary to the EPF account, matched by an employee contribution of 12%, with part of the employer's share going to the Employees' Pension Scheme (EPS).
ESI applies to employees earning up to Rs 21,000 per month (as of current regulations) in establishments with 10 or more employees. The employee contribution is 0.75% of gross wages; the employer contributes 3.25%. ESI provides medical, maternity, and disability benefits. Both PF and ESI must be deposited by the 15th of the following month.
Zoho Payroll handles both automatically. Once configured with the employer's PF and ESI registration numbers and the applicable salary component mapping, the system calculates deductions for every employee on each payroll run, generates the ECR file for PF portal upload, and tracks the monthly liability. Non-compliance attracts penalties and interest under both Acts.
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