Frequently Asked Questions
What is the PF wage ceiling for FY 2025-26? ＋
The statutory PF wage ceiling is ₹15,000/month for Basic+DA. Employers must contribute PF on at least this amount for eligible employees. Employees earning more can opt for higher PF on actual Basic+DA.
Is ESI mandatory for all employees? ＋
ESI applies to employees with gross salary ≤ ₹21,000/month in establishments with 10 or more employees (20 in some states). Once enrolled, ESI coverage continues even if salary crosses ₹21,000 until the ESI contribution period ends.
What is EDLI and who pays it? ＋
EDLI (Employees' Deposit Linked Insurance) is a life insurance scheme under EPF. Only the employer pays 0.5% of Basic+DA (subject to ₹15,000 ceiling), minimum ₹75/month. The employee pays nothing for EDLI.
What is the difference between EPF and EPS? ＋
EPF (Employee Provident Fund) is the savings component, both employee (12%) and part of employer's 12% (3.67%) go here. EPS (Employee Pension Scheme) is the pension component, 8.33% of employer's share (capped at ₹1,250/month) goes to EPS. EPS builds pension entitlement, EPF builds a lump-sum retirement corpus.
Can an employee contribute more than 12% to PF? ＋
Yes, the excess voluntary contribution is called VPF (Voluntary Provident Fund). VPF earns the same interest as EPF (currently 8.25% p.a.) and enjoys the same EEE tax exemption. There is no employer matching for VPF.