EPF and ESI contribution rates tell you exactly how much you and your employer pay each month into India’s two main statutory payroll schemes: the Employees’ Provident Fund (retirement savings) and Employees’ State Insurance (health and disability cover for lower-wage employees). Every employer in India — including Employers of Record hiring on your behalf — must register eligible employees and remit these contributions monthly.
This guide covers the full official 2026 rate schedule for both schemes, sourced directly from EPFO and ESIC.
- EPF (Provident Fund) is 12% of basic wages + DA from both employer and employee, mandatory for employees earning up to the ₹15,000/month wage ceiling.
- Within the employer’s 12% EPF contribution, 8.33% is redirected to the Employees’ Pension Scheme (EPS).
- ESI (State Insurance) is 4% total — 3.25% employer, 0.75% employee — for employees earning up to ₹21,000/month (₹25,000 for persons with disabilities).
- The EPF wage ceiling has remained ₹15,000/month since September 2014, with no change confirmed for 2026 as of this writing.
EPF (Employees’ Provident Fund) Contribution Rates (2026)
Figures below reflect official EPFO rates as of this writing. Confirm current thresholds directly with EPFO before finalizing payroll, as wage ceiling reviews are periodically proposed.
*EPS is calculated on wages up to the ₹15,000 ceiling even if actual EPF contributions are based on a higher declared wage; capped at ₹1,250/month per employee.
ESI (Employees’ State Insurance) Contribution Rate
Employees earning above the ₹21,000/month ceiling are not covered under ESI and don’t have ESI contributions deducted. Employees with an average daily wage up to ₹176 are exempted from the employee-side contribution, though the employer still contributes.
How EPF and ESI Interact
An employee can be covered by both schemes simultaneously if they fall under both wage ceilings, or by EPF alone if their wage exceeds the ESI ceiling but not necessarily the EPF one (employers can voluntarily continue EPF coverage above ₹15,000 by mutual agreement, which is common practice). There’s no single combined “payroll tax” figure in India — EPF and ESI are separate schemes with separate registration, separate wage ceilings, and separate payment portals (EPFO’s unified portal and the ESIC portal respectively).
Common Mistakes Employers Make
The most frequent error is assuming EPF and ESI apply to the same wage ceiling — they don’t; EPF’s ceiling is ₹15,000 and ESI’s is ₹21,000, so an employee earning ₹18,000 may need ESI coverage but not mandatory EPF coverage (though most employers register them for EPF anyway as standard practice). A second common mistake is missing the registration deadline for a new hire, since both EPF and ESI registration should happen at or before the employee’s start date, not retroactively. A third is applying the EPS cap incorrectly — EPS is always capped at 8.33% of ₹15,000 (₹1,250/month), even when total EPF contributions are calculated on a higher wage.
Don’t want to track EPF and ESI deadlines yourself?
Asiacruit runs EPF, ESI, and TDS payroll correctly and on time for every hire in India — whether you have a registered entity or not.
Book a Demo →Frequently Asked Questions
12% of basic wages plus dearness allowance from both employer and employee, mandatory for employees earning up to the ₹15,000/month wage ceiling. Within the employer’s 12%, 8.33% is directed to the Employees’ Pension Scheme.
4% of gross wages total: 3.25% employer and 0.75% employee, for employees earning up to ₹21,000/month (₹25,000/month for persons with disabilities).
No confirmed change as of this writing. The ₹15,000/month ceiling has been in place since September 2014.
Yes. An EOR like Asiacruit registers eligible employees for EPF and ESI, calculates the correct contributions, and remits them on schedule as part of running compliant payroll in India.
Related Reading
- Employer of Record India: Hire Fast Without a Local Entity
- SSS Contribution Table 2026: Full Bracket Guide & How to Compute
- BPJS Contribution Rates 2026: Full Employer & Employee Table
- Cost of Hiring in India (2026): Full Salary & Statutory Breakdown
- Termination & Gratuity in India: A Guide for Foreign Employers