Free PF & ESI Calculator 2026 | How to Calculate PF and ESI in India
Understand exactly how PF (Provident Fund) and ESI (Employee State Insurance) are calculated in India, with worked examples for different salary levels.
PF Calculation Formula in India (2026)
Provident Fund (PF) is calculated as a percentage of the employee’s Basic Salary + Dearness Allowance (DA). The contribution rates effective in 2026 are:
Employee PF Contribution
12% of Basic + DA
Deducted from employee’s salary every month and deposited to EPF account
Employer PF Contribution
12% of Basic + DA
Paid by employer in addition to salary. Split into EPF (3.67%) + EPS (8.33%, capped at ₹15,000 basic)
Employer Contribution Breakdown
| Component | Rate | Notes |
|---|---|---|
| EPF (Employee Provident Fund) | 3.67% | Goes to EPF corpus — fully withdrawable by employee |
| EPS (Employee Pension Scheme) | 8.33% | Capped at ₹1,250/month (8.33% × ₹15,000 wage ceiling) |
| EDLI (Insurance) | 0.5% | Capped at ₹75/month (0.5% × ₹15,000) |
| EPF Admin Charges | 0.5% | Minimum ₹75/month per establishment |
ESI Calculation Formula in India (2026)
ESI is calculated on Gross Salary (all salary components except reimbursements and ex-gratia) for employees earning up to ₹21,000 per month.
Employee ESI Contribution
0.75% of Gross Salary
Deducted from employee salary. If gross > ₹21,000, employee is exempt from ESI.
Employer ESI Contribution
3.25% of Gross Salary
Paid by employer in addition to salary for covered employees.
PF & ESI Calculation Examples for Different Salary Levels
| Gross Salary | Basic (40%) | Employee PF (12%) | Employer PF (12%) | Employee ESI (0.75%) | Employer ESI (3.25%) | ESI Applicable? |
|---|---|---|---|---|---|---|
| ₹10,000 | ₹4,000 | ₹480 | ₹480 | ₹75 | ₹325 | Yes |
| ₹15,000 | ₹6,000 | ₹720 | ₹720 | ₹113 | ₹488 | Yes |
| ₹20,000 | ₹8,000 | ₹960 | ₹960 | ₹150 | ₹650 | Yes |
| ₹21,000 | ₹8,400 | ₹1,008 | ₹1,008 | ₹158 | ₹683 | Yes (last month) |
| ₹25,000 | ₹10,000 | ₹1,200 | ₹1,800* | Nil | Nil | No (above ₹21,000) |
| ₹50,000 | ₹20,000 | ₹1,800* | ₹1,800* | Nil | Nil | No |
*PF is capped at 12% of ₹15,000 (= ₹1,800) when basic salary exceeds ₹15,000, unless employer opts for contribution on actual basic. Employee can voluntarily contribute more via VPF.
Important PF & ESI Rules Every Employer Must Know
- PF wage ceiling: The statutory PF wage ceiling is ₹15,000/month. Employers need only contribute PF on ₹15,000 even if basic is higher (though they can contribute on actual basic)
- ESI contribution months: If an employee’s salary exceeds ₹21,000 mid-year, ESI continues for the rest of that contribution period (April–September or October–March) before they exit coverage
- PF opt-out for higher earners: Employees with basic salary over ₹15,000 at the time of joining a new employer can opt out of PF (once an existing PF member, always a member)
- PF on variable pay: Variable components paid monthly (like monthly incentives) may be included in PF wages if they are paid uniformly — EPFO clarifications apply
- ESI benefits: Covered employees get free medical treatment at ESIC dispensaries, sickness benefits (70% of wages for 91 days/year), maternity benefit, and disablement benefits
Frequently Asked Questions
How is PF calculated in India in 2026?
PF (Provident Fund) in India is calculated as 12% of basic wages + dearness allowance (DA). The employee contributes 12% and the employer contributes 12%. The employer’s 12% is split: 8.33% goes to EPS (Employee Pension Scheme, capped at ₹1,250/month), 3.67% goes to EPF, and the employer also pays 0.5% EDLI premium and 0.5% administrative charges. Total employer cost is approximately 13% of basic wages.
What is the ESI contribution rate in India?
The ESI (Employee State Insurance) contribution rate in India is 0.75% from the employee and 3.25% from the employer, calculated on gross monthly salary. This applies only to employees earning up to ₹21,000 per month gross (₹25,000 for persons with disability). Employees earning above ₹21,000/month are not covered under ESI.
Is PF mandatory for all employees?
PF is mandatory for establishments with 20 or more employees. All employees in covered establishments earning up to ₹15,000 basic per month must be enrolled. Employees earning above ₹15,000 basic per month who are new entrants (never had a PF account) can choose not to be enrolled. However, employees who already have a PF UAN must continue contributions regardless of salary level.
What is the PF wage ceiling in India?
The statutory PF wage ceiling in India is ₹15,000 per month for basic wages. This means the minimum employer PF contribution is calculated on ₹15,000 even if the employee’s actual basic salary is higher. However, employers can opt to contribute PF on the actual basic salary above ₹15,000 — this is beneficial for employees as it builds a larger retirement corpus.
When does ESI stop for an employee whose salary increases above ₹21,000?
When an employee’s gross salary increases above ₹21,000 per month, ESI coverage does not end immediately. The employee continues to be covered and pay ESI until the end of the current contribution period (April to September, or October to March). After the contribution period ends, they exit ESI coverage and are no longer eligible for ESI benefits, and no further deductions are made from their salary.
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