EPF & ESI Compliance Guide: Registration, Returns and Penalties (2026)

Once your business crosses certain headcount thresholds, EPF (Employees' Provident Fund) and ESI (Employees' State Insurance) registration become legally mandatory — not optional. Missing them invites heavy interest, damages and even prosecution under the EPF & MP Act, 1952 and the ESI Act, 1948.

When do EPF and ESI become mandatory?

• EPF: Establishments employing 20 or more persons. Once covered, employees earning up to ₹15,000/month basic + DA must be enrolled; higher earners can voluntarily opt in.
• ESI: Establishments employing 10 or more persons (20 in some states). Employees earning up to ₹21,000/month gross (₹25,000 for persons with disability) must be enrolled.

Contribution rates

Scheme	Employee	Employer
EPF	12% of basic + DA	12% (split: 3.67% EPF + 8.33% EPS up to ₹15,000)
ESI	0.75% of gross wages	3.25% of gross wages

Employer also pays EDLI (0.50%) and admin charges (0.50%) over and above EPF.

Monthly compliance — what's due and when

• EPF ECR upload + payment — by the 15th of the following month
• ESI contribution — by the 15th of the following month
• UAN / Aadhaar / bank seeding for every new joiner before first ECR
• Exit marking for resigned employees in the same month

Penalties for late filing

• EPF interest: 12% p.a. on delayed contribution
• EPF damages (Sec 14B): 5–25% p.a. depending on delay
• ESI interest: 12% p.a. + damages 5–25% p.a.
• Prosecution possible for repeated default

Beyond registration — claims, transfers and inspections

Routine work includes: PF withdrawal & advance claims (Form 19, 31, 10C, Composite), PF transfers on job change, ESI medical cards & maternity benefit claims, and responding to EPFO / ESIC inspections and 7A enquiries.

Tax Easy India offers end-to-end EPF & ESI registration, monthly ECR filing, KYC and claims support for businesses across India. Talk to our payroll compliance team to stay 100% compliant.