Indian payroll compliance centers on PF (Provident Fund, 12%+12% employer/employee), ESI (Employees' State Insurance, applicable to employees earning up to ₹21,000/month, or ₹25,000 for persons with disability, at 3.25% employer + 0.75% employee), TDS (Tax Deducted at Source on salaries), and PT (Professional Tax, a state-level levy). Both PF and ESI contributions must be deposited by the 15th of the following month — e.g. June 2026 salary deductions must reach EPFO and ESIC by 15 July 2026 — via the Electronic Challan cum Return (ECR) filed on the EPFO Unified Portal, which reports employee-wise wages, contributions, and account numbers.
PF: 12% employer + 12% employee contribution (unchanged in 2026); wage ceiling for the 'excluded employee' definition remains ₹15,000/month.
ESI: applies to employees earning up to ₹21,000/month (₹25,000 for persons with disability); employer contributes 3.25%, employee 0.75% (total 4%).
Both PF and ESI must be deposited by the 15th of the following month via the EPFO Unified Portal's Electronic Challan cum Return (ECR).
Professional Tax (PT) is a separate state-level payroll levy, varying by state.
Costs
PF contribution: 12% employer + 12% employee
ESI contribution (employees earning ≤₹21,000/month): 3.25% employer + 0.75% employee
Timelines
PF/ESI monthly deposit deadline: 15th of the following month
Required Documents
Employee PAN and Aadhaar
UAN (Universal Account Number) for PF
ESIC registration number
Common Mistakes
Missing the 15th-of-the-month PF/ESI deposit deadline, which triggers penalties and, for repeated non-payment, can lead to fines up to ₹3,00,000 and imprisonment.
Forgetting that Professional Tax is a separate state-level obligation on top of PF/ESI/TDS.