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The employer's contribution to the EPF is 12% of the employee's basic salary plus dearness allowance. This 12% is further broken down to 8.33% toward EPS, 3.67% toward EPF, and other small percentages going to administrative charges for EDLI (0.5%) and admin charges (0.5%).
The Employee State Insurance Scheme is mandatory for employees earning up to INR 21,000 per month (or INR 25,000 for disabled employees). This is funded by contributions from both the employer and employee, as well as the government.
These contributions are withheld and remitted monthly by the employer via EPFO/ESIC/state portals; income‑tax TDS deposited to the Central Government (CIN/Challan ITNS‑281), reported in quarterly Form 24Q.
| Contribution | Contribution amount |
|---|---|
| Employees’ Provident Fund (EPF) | 12% of basic + Dearness Allowance (8.33% to pension fund up to ₹15,000 cap + 3.67% to EPF) |
| Employees’ Deposit Linked Insurance (EDLI) | 0.5% of basic + DA (capped at ₹15,000) |
| EPF Administrative Charges | 0.5% of EPF wages, minimum ₹500/month (₹75 if no contributory members) |
| Employees’ State Insurance (ESI) | 3.25% of gross wages (only if employee earns ≤ ₹21,000/month, or ₹25,000 for disabled employees), eligibility rules apply |
| Gratuity (accrual) | ≈ 4.81% of basic pay (statutory payout = 15 days’ wages per completed year after 5 years’ service) |
| Statutory Bonus (accrual) | 8.33% – 20% of eligible wages (if earning ≤ ₹21,000/month, subject to surplus) |
| Labour Welfare Fund (state-specific) | Small fixed amounts where applicable (e.g. ₹24–₹75 per employee, varies by state) |
Social security contributions in India are mandatory flat-rate salary percentages, varying by income level, ranging between 15% - 25%.
| Gross income | Progressive tax rate |
|---|---|
| ₹0 – ₹21,000/month (gross) | ESI employer 3.25% |
| > ₹21,000/month | ESI not applicable |
| ₹0 - ₹15,000/month (basic + DA) | EPS portion of EPF limited to ₹1,250/month (8.33% of ₹15,000); balance to EPF |
In India, employees contribute through progressive income tax (ranging from 0% to 30% depending on income), as well as mandatory social security deductions. These include 12% of basic salary plus dearness allowance towards the Provident Fund, 0.75% of gross wages for State Insurance if earning up to ₹21,000 per month, and a small state-level professional tax of up to ₹200 per month where applicable.
The employee's income tax rate in India is progressive, with rates ranging from 0% to 3%, depending on the individual's gross income.
| Gross income | Tax rate |
|---|---|
| ₹0 – ₹3,00,000 | 0% |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% (surcharge may apply) |
| Contribution | Contribution Amount | Note |
|---|---|---|
| Employees’ Provident Fund (EPF) | 12% of basic + Dearness Allowance | May be higher (Voluntary PF); tax treatment per regime. |
| Employees’ State Insurance (ESI) | 0.75% of gross wages (if earning ≤ ₹21,000/month) | Deducted via payroll. Eligibility continues to end of contribution period. |
| Professional Tax (State Levy) | ₹0–₹200/month (varies by state) | Employer withholds & remits. |
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