PF and ESI in India: what they are and what to check
PF (Provident Fund) and ESI (Employees' State Insurance) are two statutory benefits many salaried employees in India receive. PF is a retirement savings scheme run by EPFO, funded by you and your employer. ESI is a health and cash-benefit insurance scheme run by ESIC for eligible employees.
Indian central rules as of 31 October 2026. Whether either applies to you depends on your employer and your wages.
At a glance
- PF: you and your employer both contribute. The employee share is commonly 12 percent of basic pay, and the employer's share sits inside your CTC.
- UAN: one number that stays with you across employers.
- ESI: employer and employee contribute; benefits include medical care for you and your family and cash benefits in specified situations.
- Ask HR in writing whether PF and ESI apply to you before you accept an offer.
How does PF work?
Your employer deducts the employee share from your salary and adds the employer share. Both go into your PF account at EPFO. Mandatory coverage depends on a wage ceiling; the Ministry of Labour and Employment raised the EPFO wage ceiling from 15,000 to 25,000 rupees a month from 17 September 2026 (checked 31 October 2026). Check your own coverage with HR and on the EPFO member portal.
What is a UAN?
The Universal Account Number (UAN) is a 12-digit number issued by EPFO that links your PF accounts across employers. Activate it on the EPFO member portal, check your passbook, and make sure each employer records your exit date so you can transfer your PF to the next employer. See what is UAN and PF and EPFO.
How does ESI work?
ESI is run by the Employees' State Insurance Corporation (ESIC). It applies to eligible establishments and to employees whose wages fall within the limit set by the scheme. Both employer and employee contribute. Benefits include medical care, sickness, maternity, disablement and dependants' benefits. The wage limit and contribution rates change, so read the current figures on esic.gov.in.
What should I check about PF and ESI in an offer?
| Question | Why it matters |
|---|---|
| Is employer PF inside the CTC? | It lowers your in-hand pay; see CTC vs in-hand salary |
| Is ESI applicable, and from when? | It decides your health cover |
| Will my UAN be reused? | Keeps your PF history together |
| Does the payslip show PF and ESI lines? | Lets you verify deductions |
Frequently asked questions
Is PF part of CTC? The employer's PF share is. Your own share is deducted from your gross salary.
Do I lose my PF when I change jobs? No. Your UAN stays the same and you can transfer the balance.
Who is covered under the Code on Social Security, 2020?
The Ministry's handbook for employers says the provident fund provisions apply to establishments employing 20 or more employees, and ESI applies to establishments employing 10 or more persons, except seasonal factories. ESI also applies to hazardous or life-threatening activities even when only one employee is employed. The Code has applied since 21 November 2025. These are central-government-sphere rules; your own state and sector can add detail.
| PF | ESI | |
|---|---|---|
| Administered by | EPFO | ESIC |
| Applies to establishments with | 20 or more employees | 10 or more persons |
| Schemes under the Code | Provident fund, pension, deposit linked insurance | Insurance for sickness, maternity and more |
| Contributions | Employee and employer | Employer pays both the employer's and the employee's contributions (handbook, section 31) |
What ESI benefits are listed
The handbook lists sickness benefit, maternity benefit, disablement benefit, dependants' benefit, medical benefit for the insured person and family, and funeral expenses. For female insured persons, the definition of family includes dependent parents, including in-laws, within the income limit set by the Central Government.
How the wage definition affects you
The Ministry's FAQs explain that "wages" covers basic pay, dearness allowance and retaining allowance, and that if other allowances exceed 50 percent of total remuneration the excess is added back to wages. The same definition applies across the four labour codes, and the Ministry says it has applied since 21 November 2025. The March 2026 FAQs add that statutory components such as employer PF and pension contributions and statutory bonus count in remuneration for the 50 percent calculation, while gratuity and ESI do not. Ask HR how your salary breakup maps to this definition.
Common mistakes
- Assuming PF is optional. Ask whether your employer is covered.
- Not activating your UAN, or leaving an old exit date blank.
- Treating ESI as a replacement for health insurance without reading what it covers.
- Not checking that PF and ESI lines appear on your payslip.
- Letting an employer "adjust" deductions without telling you.
More questions people ask
Where do I check my PF balance?
On the EPFO member portal, using your UAN. EPFO blocked our automated checks, so use the portal directly.
Does a fixed-term employee get benefits?
The Ministry's handbook says a fixed-term employee is eligible for gratuity after one year of service under the contract.
What if my employer does not deduct PF?
Ask HR in writing and keep your payslips. If it is not fixed, use the official EPFO channels.
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.