Compliance is often the biggest headache for small teams. As you hire your first 10-20 employees, understanding PF (Provident Fund) and ESI (Employee State Insurance) becomes critical.
When Does PF & ESI Apply?
Generally, PF is mandatory for establishments with 20 or more employees, while ESI applies to those with 10 or more (in certain states). However, voluntary registration is common to provide better benefits to employees.
Calculations Made Simple
PF typically involves a 12% contribution from both employee and employer. ESI rates are much lower but require precise monthly tracking. Modern HR modules, like the one in NewBiz ERP, handle these calculations automatically during payroll runs.