PF and ESI registration: when employers must register and what it involves

If you employ people, you may have to register for Provident Fund (PF) and Employees' State Insurance (ESI). This guide explains when each applies and what an employer does after registering.

What are PF and ESI?

• PF (EPF) is a retirement savings scheme run by the Employees' Provident Fund Organisation (EPFO). Both the employer and the employee contribute a share of wages every month.
• ESI is a social insurance scheme run by the Employees' State Insurance Corporation (ESIC). It gives covered employees medical care and cash benefits in cases such as sickness and maternity.

Our comparison of EPF and ESIC puts the two side by side.

When must an employer register for PF?

PF registration is compulsory for establishments that reach a headcount set in the law, which is usually 20 employees, and some businesses can also register voluntarily with fewer. Coverage of an employee depends on the wage ceiling in the scheme. Check the EPFO portal or ask our Experts for the rule that applies to your establishment.

When must an employer register for ESI?

ESI applies to establishments that reach a headcount set in the law, which is usually 10 employees (the number differs in some states), and to employees whose wages are within the ceiling of the scheme. Registration is done with ESIC, and each covered employee gets an insurance number.

What do I need to register?

• PAN and address proof of the business and its registration documents (for example incorporation certificate, partnership deed or shop registration)
• Details of the owner or directors
• Bank account details
• A list of employees with their Aadhaar, PAN, date of joining and wages
• A digital signature, where the portal asks for one

What does the employer do every month?

1. Calculate each employee's contribution from their wages.
2. Deduct the employee's share and add the employer's share.
3. Pay both through the portal's challan, usually by the 15th of the next month.
4. File the monthly return (the ECR for PF) and update joiners and leavers.

Contribution rates and wage ceilings are set by the government and have been revised before, so confirm the current figures on the official portals.

What happens if I pay late?

Late payment attracts interest and, in some cases, damages. Missed contributions also affect your employees, because their PF balance and ESI benefits depend on the payments being made. A mismatch between your payroll records and what you filed can lead to notices.

Do I need help with PF and ESI?

Registration is a one-time job, but the monthly contribution and return work repeats and has to match your payroll. Our Experts handle both: see PF registration, ESI registration, PF return filing and payroll processing.

This article is general information, not individual professional advice. Thresholds, rates and due dates change, so check the official EPFO and ESIC portals or ask our Experts before you act.