Frequently asked questions
What is the PF contribution rate in India?
Employees contribute 12% of basic plus DA, and employers contribute 12%, part of which goes to the pension scheme. A statutory wage ceiling applies for mandatory coverage. Verify current rates with EPFO.
What is the difference between PF and ESI?
PF is a retirement savings scheme calculated on basic plus DA. ESI is a medical and cash-benefit scheme calculated on gross wages, and applies only up to a wage ceiling. The different calculation bases are a common source of error.
Is ESI calculated on basic or gross salary?
On gross wages. PF is calculated on basic plus DA. Applying the wrong base creates a shortfall recoverable with interest.
When must PF and ESI be remitted?
Both are monthly obligations, generally due by the 15th of the following month. Late remittance attracts interest and damages on the amount itself.
Is professional tax the same across India?
No. It is a state levy, so slabs, frequency and filing requirements vary by state. Always apply the rules of the state where the employee works.