PF and ESI for Your First 10–20 Hires: When They Apply and What's Due
Hiring your first employees? Here's exactly when PF and ESI become applicable, the 15th-of-the-month deadline, contribution rates, and what a late deposit costs.
PF becomes mandatory once you have 20 or more employees; ESI once you have 10 or more (covering employees earning up to ₹21,000/month). Both contributions are due by the 15th of the following month, and late deposit attracts interest and damages. If you're hiring your first team, these thresholds and deadlines are the payroll-compliance basics to get right from day one.
When PF and ESI apply
- EPF (Provident Fund): mandatory for establishments with 20 or more employees. Register with EPFO within the prescribed window of crossing the threshold. Voluntary coverage is possible below it.
- ESI (Employees' State Insurance): mandatory for establishments with 10 or more employees, covering those earning up to ₹21,000/month. Register with ESIC on crossing the threshold.
Once applicable, coverage generally continues, so track headcount as you grow toward each threshold.
Contribution rates
- PF: 12% of basic wages each from employer and employee; the employer's 12% splits between the pension scheme (8.33%) and PF.
- ESI: 0.75% of gross wages from the employee and 3.25% from the employer, for employees within the wage ceiling.
The deadline: 15th of the following month
Both PF and ESI contributions — and the PF ECR — are due by the 15th of the month after the wage month. Miss it and PF late deposit attracts interest (and damages); ESI delay attracts interest and can bar related employer benefits.
DPIIT note: self-certify, but still comply
DPIIT-recognised startups can self-certify under specified labour laws including these — but that changes the inspection regime, not the obligation. You still deposit on time.
Put the 15th on a calendar that reminds you
A fixed monthly deadline across PF and ESI is easy to slip in a busy month. ComplianceStack puts both on your calendar with reminders and stores each challan as evidence. Get your free compliance health check.
General information, not legal advice. Thresholds and rates change by notification — confirm with your CA/CS or payroll advisor.
FAQs
- When does PF become applicable?
- At 20 or more employees (with voluntary coverage possible below that). Register with EPFO on crossing the threshold.
- When does ESI become applicable?
- At 10 or more employees, covering those earning up to ₹21,000/month. Register with ESIC on crossing the threshold.
- What are the PF and ESI due dates?
- Both are due by the 15th of the month following the wage month, along with the PF ECR.
- What are the contribution rates?
- PF: 12% each from employer and employee. ESI: 0.75% employee + 3.25% employer, within the wage ceiling.
This article is general information, not tax, legal or accounting advice. Statutory timelines and thresholds change by notification — confirm applicability and interpretation with your CA, CS, or lawyer before acting.
Know exactly what applies to you
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