PF and ESI Payment: Overview, Due Dates & Procedure

Provident Fund (PF) and Employees’ State Insurance (ESI) payments are mandatory contributions ensuring employee financial security and social welfare in India. Regulated by the Employees' Provident Fund Organisation (EPFO) and the Employees' State Insurance Corporation (ESIC), these payments provide retirement savings, medical benefits, and financial protection. Employers must adhere to the prescribed contribution rates and due dates to avoid penalties and ensure compliance with labor laws. Understanding the payment process, benefits, and due dates of PF and ESI contributions helps businesses manage their obligations efficiently while safeguarding employee well-being.

What is PF Payment?

PF Payment is a crucial component of India's retirement savings, managed by the Employees' Provident Fund Organisation (EPFO). Both employees and employers contribute 12% or 10% (applicable to certain establishments) of the employee's basic salary and dearness allowance. These contributions offer tax benefits under Section 80C and help build a retirement corpus. Employers can make EPF online payments through the EPFO portal or authorised banks, ensuring compliance with labor laws. By facilitating timely PF payments, employers support employees' financial security while adhering to regulatory requirements.

Applicability of Provident Fund (PF) Payments

PF is mandatory for establishments with 20 or more employees, although smaller establishments can opt-in voluntarily. For employees earning up to ₹15,000 per month, PF contributions are compulsory, while those earning above this threshold can contribute voluntarily with employer and regulatory approval. Both employers and employees contribute a certain percentage for the Provident fund. PF provides significant benefits, including retirement savings, tax advantages, and partial withdrawal options for specific needs like education or medical emergencies.  

PF Payment Due Date

The PF Payment due date is the “15th of the following month”. For instance, an employer must pay the employee's PF contributions for February 2025 on or before 15th March 2025. It is crucial to make these payments before the due date to avoid penalties and interest. Timely payments ensure compliance with labor laws and help maintain a smooth relationship with the Employees' Provident Fund Organisation (EPFO).

Penalties for Non-Payment or Late PF Payment

Employers who fail to make timely PF contributions are subject to penalties. The penalties for late PF payments are levied at flat rates based on the duration of the delay. In the table below, we have provided a summary of the penalty structure:

Easily pay PF contributions and file returns on time with IndiaFilings! Avoid penalties and ensure compliance with expert assistance.

Get Started!

What is ESI Scheme & Payment?

The Employees' State Insurance (ESI) Scheme is a comprehensive social security program in India, providing medical and financial benefits to employees. Financed by contributions from both employers and employees, the scheme covers establishments with 10 or more employees in sectors like factories, hotels, restaurants, and educational institutions. As of July 2019, employers contribute 3.25% of wages, while employees contribute 0.75%. The ESI Scheme offers benefits such as sickness benefits, maternity benefits, and funeral expenses, ensuring financial protection for employees and their families during medical emergencies and other contingencies.

Applicability of ESI Payments

The Employees' State Insurance (ESI) scheme in India applies to establishments with 10 or more employees, with the specific applicability varying by state. The scheme covers employees earning a gross salary of up to ₹21,000 per month (₹25,000 for persons with disabilities), providing medical, maternity, disability, and dependent benefits. The employer is responsible for paying the Employees’ State Insurance (ESI) contributions for every eligible employee. This includes both the employer’s and employee’s share, which is deducted from the wages. The employer must deposit these contributions at the specified rates to the Employees’ State Insurance Corporation (ESIC) through designated branches of the State Bank of India (SBI) and other authorised banks.

ESI Payment Due Date

The ESI Payment due date is the “15th of the following month”. For instance, an employer must pay the employee's ESI contributions for February 2025 by 15th March 2025. It is essential to make these payments before the due date to avoid penalties and interest. 

Penalties for Non-Payment or Late ESI Payment

Employers who fail to make timely ESI contributions face significant penalties. Employers are liable for prosecution under Section 85(a) and Section 85A of the ESI Act for non-payment or late payment of contributions. The ESIC may levy damages for delayed payments at the following rates:

Effortlessly manage ESI payments and file returns on time with IndiaFilings! Ensure compliance and avoid penalties with expert support.  

Get Started!

Get Expert Help to Pay & File PF & ESI Returns On Time!

Ensuring compliance with PF and ESI regulations is essential for businesses to avoid penalties, legal complications, and disruptions in employee benefits.

PF Payment & Return Filing

Managing PF payments and filing returns is crucial to ensure compliance with EPFO regulations. IndiaFilings helps businesses make timely PF contributions, avoiding penalties and ensuring smooth payroll management. Our experts handle the entire filing process, so you can focus on your business.

Get Started!

ESI Payment & Return Filing

Ensuring accurate ESI payments and return filing is essential to comply with ESIC norms and safeguard employee benefits. IndiaFilings simplifies the process, helping you make timely payments, avoid penalties, and maintain compliance with ease.

Get Started!

FAQs on PF and ESI Payment

About the Author