EPF & ESI Statutory Compliance & Calculation Guide (2026)
Clear rules, exact formulas, statutory wage caps, and automated ECR text generation for Indian SME employers.
1. Employee Provident Fund (EPF) Rules & Contribution Breakdown
The Employees' Provident Fund and Miscellaneous Provisions Act, 1952 applies mandatorily to any business establishment employing 20 or more persons.
| Component | Employee Share | Employer Share |
|---|---|---|
| Provident Fund (EPF) | 12.00% | 3.67% |
| Pension Scheme (EPS) | 0.00% | 8.33% (Max ₹1,250) |
| EDLI (Insurance) | 0.00% | 0.50% (Max ₹75) |
| EPF Admin Charges | 0.00% | 0.50% (Min ₹500/mo) |
| Total Contribution | 12.00% | 13.00% |
Statutory Ceiling: While calculating EPF, the statutory wage ceiling is ₹15,000/month. For employees earning above ₹15,000, employers commonly cap the deduction at ₹1,800/month (12% of ₹15,000).
2. Employee State Insurance (ESI) Wage Threshold & Rates
The ESI Act, 1948 provides medical and social security benefits. It applies to factories and commercial establishments with 10 or more employees.
- Wage Ceiling: Applicable only to employees whose gross monthly wages are less than or equal to ₹21,000 (₹25,000 for persons with disabilities).
- Employee Contribution Rate: 0.75% of gross wages.
- Employer Contribution Rate: 3.25% of gross wages.
- Total ESI Contribution: 4.00% of gross monthly wages.
3. Monthly ECR & Challan Filing Deadlines
Both EPF and ESI contributions deducted from employee wages must be deposited with the respective authorities by the 15th of the following month.
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