PF & ESI
Statutory contributions and the true employer cost
Worked example
Using the default values, pf & esi gives a employee deduction of ₹3,000.
| Item | Value |
|---|---|
| PF wage base | ₹25,000 |
| Employee PF 12% | ₹3,000 |
| Employer EPS 8.33% | ₹1,250 |
| Employer EPF 3.67% | ₹1,751 |
| Admin charges 0.5% | ₹125 |
| ESI applies | No — gross above ₹21,000 |
| Employee ESI 0.75% | ₹0 |
| Employer ESI 3.25% | ₹0 |
| Deducted from salary | ₹3,000 |
| Employer contributes | ₹3,125 |
| Total cost to company | ₹53,125 |
What you need
- Basic + DA (monthly)
- Gross salary (monthly)
- PF base
Questions
Is PF calculated on the ₹15,000 ceiling or actual basic?
The statutory minimum is on ₹15,000, but most employers contribute on actual basic plus DA. Both options are above — check your payslip to see which yours uses.
What is EPS?
The Employees Pension Scheme. Of the employer 12%, 8.33% goes to pension and the rest to your PF balance. The pension share is capped at ₹1,250 a month.
Important
PF stays 12% plus 12%, with the ₹15,000 ceiling unchanged, though most employers compute on actual basic plus DA. EPS is capped at ₹1,250 a month. ESI applies where gross is ₹21,000 or less. Under the labour codes in force since 21 November 2025, wages must be at least half of total pay, so a low basic gets topped up for these calculations.