PF vs ESIC vs PT — A Quick Reference for HR Teams
Three deductions show up on almost every Indian payslip. Three different government bodies. Three different purposes. And three different sets of rules on who's covered and how much gets deducted. Here's the reference we wish someone had handed us on day one.
PF (Provident Fund)
A retirement savings scheme under the EPF & Miscellaneous Provisions Act, 1952, run by the EPFO.
- 12% + 12%Employee + employer, on Basic + DA
- ₹15,000/moWage ceiling for mandatory coverage
- 20+Employees for mandatory coverage
Of the employer's 12%, 8.33% routes to the Employees' Pension Scheme (EPS) and the remaining 3.67% to the employee's own EPF account. Above the ₹15,000 ceiling, contribution is voluntary. Filed monthly via the Electronic Challan cum Return (ECR) on the EPFO Unified Portal.
ESIC (Employees' State Insurance)
A health insurance and social security scheme under the ESI Act, 1948 — covers medical treatment, sickness benefit and maternity benefit.
- 0.75% + 3.25%Employee + employer, on gross wages
- ₹21,000/moGross wage ceiling (₹25,000 for PwD)
- 10+Employees (20 in a few states)
Unlike PF, ESIC is calculated on gross wages, not Basic + DA. Coverage runs in two six-month contribution periods (April–September, October–March); if gross wage crosses the ceiling mid-period, coverage continues until the period ends.
PT (Professional Tax)
A state-level tax under Article 276 of the Constitution — every state that levies it sets its own slabs and schedule.
- ₹2,500/yrConstitutional maximum, any state
- ~20 statesLevy PT — Delhi, Haryana, UP don't
- Both regimesPT is deductible under Sec 16(iii)
Side by side
| PF | ESIC | PT | |
|---|---|---|---|
| Governed by | EPFO | ESIC | State govts |
| Calculated on | Basic + DA | Gross wages | Gross (slab) |
| Ceiling | ₹15,000/mo | ₹21,000/mo | ₹2,500/yr |
| Purpose | Retirement | Health cover | State revenue |
Where teams actually get this wrong
Calculating ESIC on Basic instead of gross — under-deducts and under-reports.
Assuming PT applies everywhere — Delhi, Haryana, UP, Rajasthan, Punjab don't levy it.
Missing the ESIC contribution-period rule — coverage continues to period end, not from the salary-change date.
Not separating voluntary PF above the ceiling — causes Form 16 reconciliation issues later.
EZER calculates all three automatically, every run
State-aware PT, gross-wage ESIC, ceiling-aware PF — without a separate spreadsheet.
Request a DemoThis is general information about Indian payroll and statutory rules, not legal or tax advice. Rules are still being notified state by state — check your own position with your consultant before you act on it.
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