EPF, ESIC, Gratuity & Payroll Compliance Slabs
Statutory employee registrations and payroll contributions are regulated under the EPFO, ESIC, and state professional tax acts.
| Labour category | Current verified position | Key requirement |
|---|---|---|
| EPF Registration | Mandatory for establishments with 20 or more employees. | Employer contribution is 12% of basic wage (capped at Rs. 15,000/month). |
| ESIC Registration | Mandatory for non-seasonal establishments with 10 or more employees. | Contribution: 3.25% (employer) and 0.75% (employee) of gross wage (cap Rs. 21,000/month). |
| Payment of Gratuity | Applicable to establishments with 10 or more employees. | Payable to employees with continuous service of 5 years or more. Capped at Rs. 20 Lakh. |
| Professional Tax (PT) | State-specific tax on employment/profession. | Slabs and monthly filings vary by state (e.g. Karnataka cap is Rs. 200/month). |
What a serious HR/payroll expert should verify
- Shop & Establishment License: Required under state laws for commercial offices and establishments within 30 days of starting.
- POSH Compliance: Establishments with 10 or more employees must form an Internal Complaints Committee (ICC) to comply with the POSH Act.
- Salary structure optimization: Segment salary into Basic, HRA, and allowances while maintaining statutory EPF and ESIC caps.
- PF Withdrawal queries: Advise employees on Form 19, 10C, and 31 withdrawal requirements for advance or final claims.
Documents for payroll and labour audits
- Monthly payroll register showing gross salary, EPF/ESIC deductions, and PT.
- EPF/ESIC monthly challans and ECR filings.
- Employee KYC (Aadhaar, PAN, Bank account details).
- Employee contracts and establishment registration details.
Labour Law Compliance Services: year and source check
Last fact-checked: 18 June 2026.
Direct and indirect tax laws, corporate filings, and compliance rules are subject to change by CBIC, MCA, EPFO, and RBI notifications. Always verify circulars before executing a transaction.
Use official government portals (such as GST portal, MCA V3, e-filing portal, and TRACES) first. Articles and competitor calculators should be treated as guidance, not legal advice.
FAQs
What is the salary limit for mandatory EPF contribution in India?
The statutory wage limit for mandatory EPF contribution is Rs. 15,000 per month (Basic salary + Dearness Allowance). Contributions are voluntary for wages exceeding this limit.
What are the employer and employee ESIC contribution rates?
The contribution rates are 3.25% of gross wages for the employer and 0.75% of gross wages for the employee, applicable to employees earning up to Rs. 21,000 per month.
When is an employee eligible for gratuity payment?
An employee is eligible for gratuity under the Payment of Gratuity Act, 1972 upon completing 5 or more years of continuous service with the same employer.