How to Register for PF and ESI in India (Complete Guide)

Every employer in India who crosses the employee threshold must register for Provident Fund (PF) under the EPFO and Employee State Insurance (ESI) under the ESIC. These are not optional welfare measures. They are statutory obligations backed by law, and non compliance can result in penalties, interest charges, and even criminal prosecution. Whether you run a Private Limited Company, an LLP, a partnership firm, or a sole proprietorship, this guide walks you through the complete PF and ESI registration process for 2026.

PF and ESI together form the backbone of employee social security in India. PF serves as a retirement savings tool where both employer and employee contribute monthly, while ESI provides health insurance, sickness benefits, and maternity coverage. This guide covers eligibility thresholds, the step by step online registration process, contribution rates, monthly filing requirements, and common compliance pitfalls that employers should avoid.

What is Provident Fund (PF) Registration

The Employees' Provident Fund (EPF) is a mandatory savings scheme governed by the Employees' Provident Fund and Miscellaneous Provisions Act 1952. It is administered by the Employees' Provident Fund Organisation (EPFO), which operates under the Ministry of Labour and Employment.

Under this scheme, both the employer and the employee contribute 12 percent of the employee's basic wages plus dearness allowance every month into a PF account. The accumulated amount, along with interest accrued over the years, is available to the employee upon retirement, resignation, or other eligible events. The scheme also includes a pension component (EPS) and a life insurance component (EDLI).

Who Needs PF Registration

PF registration is mandatory for every establishment that employs 20 or more employees. This includes factories, shops, offices, and any other commercial or industrial establishment. The employee count includes contract workers, part time workers, and temporary staff who are on the payroll.

• Mandatory coverage: Establishments with 20 or more employees at any point during the year must register
• Voluntary registration: Establishments with fewer than 20 employees can register voluntarily with the consent of the employer and a majority of employees
• Permanent obligation: Once covered, the establishment remains under PF even if the employee count drops below 20
• Applicability scope: Covers factories, shops, offices, IT companies, startups, educational institutions, hospitals, and all types of businesses

What is ESI Registration

The Employees' State Insurance (ESI) scheme is a comprehensive social security programme governed by the Employees' State Insurance Act 1948. It is administered by the Employees' State Insurance Corporation (ESIC) under the Ministry of Labour and Employment.

ESI provides insured employees and their family members with access to medical treatment, cash benefits during sickness, maternity leave, and disablement. The employer contributes 3.25 percent and the employee contributes 0.75 percent of gross wages, making the total contribution 4 percent of gross wages.

Who Needs ESI Registration

ESI registration is mandatory for establishments that employ 10 or more employees (20 in some states) where the employees earn wages up to 21,000 rupees per month.

• Employee threshold: 10 or more employees in most states, 20 in some states
• Wage limit: Employees earning up to 21,000 rupees per month (25,000 for persons with disability) are covered
• Geographic applicability: ESI is applicable only in areas where the scheme has been notified and implemented by the government
• All establishment types: Factories, shops, hotels, restaurants, cinemas, road transport, newspaper establishments, and other notified establishments

PF vs ESI: Key Differences at a Glance

While both PF and ESI are employer obligations, they serve different purposes and have different thresholds. Understanding these differences will help you plan your compliance requirements effectively.

Step 1: Check Your PF and ESI Registration Eligibility

Before starting the registration process, confirm whether your establishment meets the mandatory eligibility criteria. Getting this wrong can lead to either unnecessary compliance costs or legal penalties for non registration.

PF Eligibility Checklist

• Does your establishment employ 20 or more persons (including contract workers)?
• Is your establishment a factory, shop, office, or other commercial entity operating in India?
• If you employ fewer than 20 people, do you wish to register voluntarily?

ESI Eligibility Checklist

• Does your establishment employ 10 or more persons in your state (check state specific threshold)?
• Do any of your employees earn gross wages of 21,000 rupees per month or less?
• Is the ESI scheme notified and operational in the area where your establishment is located?

Step 2: Gather All Required Documents

Having all documents ready before starting the online registration process will save time and avoid rejections. Both EPFO and ESIC require similar establishment documents, but each has specific additional requirements.

Documents for PF Registration

• PAN card of the establishment
• Certificate of Incorporation or business registration proof (partnership deed, shop license, etc.)
• Address proof of the registered office: Rent agreement or sale deed along with a recent utility bill
• Cancelled cheque or first page of the bank passbook showing account number, IFSC code, and establishment name
• Digital Signature Certificate (DSC) of the authorized signatory (learn how to get a DSC)
• Complete employee list with name, Aadhaar number, date of joining, designation, monthly wages, and bank account details
• Salary register showing the wage breakup of basic salary, dearness allowance, and other components

Additional Documents for ESI Registration

• Employee family details including spouse, children, and dependent parents for medical benefit coverage
• Employee photographs for ESI card generation
• Attendance register or muster roll for the current month
• Wage register showing gross salary details for determining ESI coverage eligibility

Step 3: Register for PF on the EPFO Unified Portal

PF registration is entirely online and can be completed through the EPFO Unified Portal. The process takes approximately 3 to 7 working days for approval.

Step by Step PF Registration Process

1. Visit the EPFO Unified Portal at unifiedportal-emp.epfindia.gov.in
2. Click on Establishment Registration on the homepage
3. Select the type of establishment: Company, Factory, Society, Trust, or Other
4. Enter establishment details including legal name, PAN, date of setup, nature of business, and registered address
5. Enter details of all directors, partners, or proprietor including their PAN, Aadhaar, email, and mobile number
6. Enter the authorized signatory's information and attach their Class 3 DSC
7. Upload all required documents in PDF format (each file should be under 2 MB)
8. Select the date from which PF coverage is applicable (typically the date when the 20th employee joined)
9. Review all details carefully and submit the application
10. Note the application reference number for tracking

After submission, EPFO reviews the application and allots a PF Establishment Code within 3 to 7 working days. You will receive confirmation via email and SMS.

Step 4: Register for ESI on the ESIC Portal

ESI registration is also done online through the ESIC portal. The process is straightforward and typically completes within 7 working days.

Step by Step ESI Registration Process

1. Visit the ESIC portal at esic.gov.in
2. Click on Employer Registration under the Sign Up section
3. Enter the employer's mobile number and email for OTP verification
4. Fill the Employer Registration Form (Form 01) with establishment details
5. Enter details about the nature of business, date of commencement, and number of employees
6. Provide bank account details including account number, IFSC code, and branch name
7. Upload all required documents including PAN card, COI, address proof, and employee list
8. Enter details of the principal employer (managing director or authorized person)
9. Submit the application and save the registration reference number

ESIC processes the application and allots a 17 digit ESIC Code within 7 working days. You will receive login credentials to access the ESIC employer portal for ongoing compliance.

Step 5: Register Employees and Generate UAN Numbers

After receiving your PF and ESI codes, the next step is to register every eligible employee on both portals.

Employee Registration for PF

1. Log into the EPFO employer portal and navigate to Member Registration
2. Enter the employee's Aadhaar number for automatic verification of name and date of birth
3. Fill in the date of joining, designation, department, and monthly wage details
4. Enter the employee's bank account number and IFSC code for future PF withdrawals
5. Submit the registration and the system generates a Universal Account Number (UAN)
6. Share the UAN with the employee so they can activate their EPFO member portal account

Employee Registration for ESI

1. Log into the ESIC employer portal and navigate to Employee Registration (IP Registration)
2. Enter the employee's Aadhaar number, name, date of birth, and gender
3. Add family member details including spouse, children, and dependent parents for medical benefit coverage
4. Enter the nominee details for insurance benefits
5. Upload the employee's photograph
6. Submit and receive a Temporary Insurance Number (TIN) immediately
7. The permanent IP (Insured Person) Number is generated after Aadhaar verification

Step 6: Understand PF and ESI Contribution Calculations

Accurate calculation of PF and ESI contributions is critical. Errors in calculation lead to underpayment, which attracts interest and penalties, or overpayment, which impacts your cash flow.

PF Contribution Calculation

ESI Contribution Calculation

Practical Calculation Example

Consider an employee with a basic salary of 15,000 rupees and gross salary of 20,000 rupees per month.

• PF: Employee contribution = 12% of 15,000 = 1,800 rupees. Employer contribution = 12% of 15,000 = 1,800 rupees (split as 550.50 towards EPF and 1,249.50 towards EPS). EDLI = 0.50% of 15,000 = 75 rupees. Admin = 0.50% of 15,000 = 75 rupees
• ESI: Employee contribution = 0.75% of 20,000 = 150 rupees. Employer contribution = 3.25% of 20,000 = 650 rupees. Total ESI = 800 rupees
• Total employer cost per month: PF employer share (1,800) + EDLI (75) + Admin (75) + ESI employer share (650) = 2,600 rupees above the salary cost

Step 7: File Monthly PF Returns and Deposit Contributions

Every month, you must file the Electronic Challan cum Return (ECR) on the EPFO portal and deposit PF contributions by the 15th of the following month.

Monthly PF Filing Process

1. Log into the EPFO employer portal
2. Navigate to ECR Upload and download the ECR template
3. Fill in employee wise details: UAN, member name, gross wages, EPF wages, EPF contribution (employee), EPF contribution (employer), EPS contribution, and EDLI contribution
4. Upload the completed ECR file in the prescribed text format
5. The system validates the data and shows any errors for correction
6. Once validated, approve the ECR and generate the payment challan
7. Pay the total PF amount via internet banking, SBI Collect, or NEFT/RTGS
8. Download and save the payment receipt and ECR acknowledgement

Step 8: File Monthly ESI Contributions and Half Yearly Returns

ESI contributions must be deposited monthly, and a half yearly return must be filed covering all contribution and employee details.

Monthly ESI Filing Process

1. Log into the ESIC employer portal
2. Navigate to the Contribution section and select the month
3. Enter or upload employee wise contribution details including IP number, days worked, and wages earned
4. Generate the monthly challan showing total employer and employee ESI contributions
5. Pay the challan amount through internet banking or SBI Collect
6. Download the payment receipt for your records

Half Yearly ESI Return (Form 5)

File the ESI Return of Contribution in Form 5 twice a year covering the two contribution periods. The return for April to September must be submitted by November 11, and the return for October to March must be submitted by May 12.

Employee Benefits Under PF and ESI

Understanding the benefits your employees receive helps you communicate the value of PF and ESI effectively and improves employee satisfaction.

PF Benefits for Employees

• Retirement corpus: Accumulated PF balance with interest (currently 8.15% per annum) available on retirement at age 58
• Monthly pension (EPS): After 10 years of service and age 58, employees receive a monthly pension based on their service years and average salary
• Life insurance (EDLI): Up to 7 lakh rupees payable to nominees if the employee dies during active service
• Partial withdrawal: Available for house purchase (after 5 years), marriage (after 7 years), medical emergencies, and education
• Tax benefits: Employee PF contributions up to 1.50 lakh rupees qualify for deduction under Section 80C of the Income Tax Act

ESI Benefits for Employees and Families

• Medical benefit: Free outpatient and inpatient treatment at ESIC hospitals and dispensaries for the employee and all family members
• Sickness benefit: 70% of wages for up to 91 days per year during certified illness
• Extended sickness benefit: 80% of wages for up to 2 years for chronic and long term diseases like TB, cancer, and leprosy
• Maternity benefit: Full wages for 26 weeks for childbirth, with 6 weeks extension on medical grounds
• Disablement benefit: 90% of wages during temporary disablement; pension for permanent disablement
• Dependants' benefit: Monthly pension to family members if the insured person dies due to employment injury
• Funeral expenses: 15,000 rupees towards funeral costs

Penalties for PF and ESI Non Compliance

PF and ESI non compliance carries significant financial and criminal penalties. Understanding these consequences underscores the importance of timely registration and compliance.

PF Non Compliance Penalties

• Non registration: Imprisonment up to 1 year and fine up to 5,000 rupees under Section 14 of the EPF Act
• Late payment interest: 12% per annum on unpaid contributions from the due date
• Damages for delayed payment: 5% to 25% per annum on the arrear amount depending on the delay period under Section 14B
• Non filing of returns: Prosecution and penalties under Section 14 with repeated offences attracting enhanced penalties
• False statements: Imprisonment up to 1 year for providing false information or false returns

ESI Non Compliance Penalties

• Non registration: Imprisonment up to 2 years and fine up to 5,000 rupees under Section 85 of the ESI Act
• Late payment interest: 12% simple interest per annum on overdue contributions
• Non filing of returns: Penalties and potential prosecution under the ESI Act
• Deduction without deposit: Employer deducting ESI from employee wages but not depositing with ESIC amounts to criminal breach of trust

PF and ESI Registration for Different Business Types

The PF and ESI registration process remains largely the same across business types, but there are some specific considerations depending on your entity type.

Private Limited Company

A Private Limited Company must register for PF when it employs 20 or more people and for ESI when it has 10 or more employees within the wage threshold. The directors who draw a salary and work under a service contract are also covered. The company's CIN and COI are required during registration. PF and ESI compliance is part of the broader annual compliance requirements for a Pvt Ltd company.

LLP

An LLP follows the same thresholds and registration process. The LLP Agreement and LLPIN serve as establishment registration proof. Designated partners who draw remuneration and work in the day to day operations may be covered under PF and ESI. LLPs must also ensure compliance alongside their LLP annual filing obligations.

Sole Proprietorship and Partnership Firm

A sole proprietorship or partnership firm that employs 20 or more workers must register for PF. The proprietor itself is not covered under PF (only employees are), but working partners of a firm can opt for coverage. Shop license, GST registration certificate, or Udyam registration certificate serve as establishment proof.

Common Mistakes to Avoid in PF and ESI Compliance

Employers frequently make avoidable errors that lead to penalties, interest charges, and compliance notices. Here are the most common mistakes and how to avoid them.

1. Excluding contract workers from employee count: Contract workers must be included when calculating the employee threshold. The principal employer is responsible if the contractor defaults
2. Incorrect wage structuring to reduce PF: Artificially splitting salary to reduce the basic component and lower PF contributions can be challenged by EPFO during inspections. PF is calculated on all allowances that are universally and necessarily paid to all employees
3. Not registering employees immediately: Every employee must be registered within the first month of joining. Backdated registrations attract penalties
4. Missing the 15th of month deadline: Even a one day delay triggers interest at 12% per annum. Set up automated payroll systems to ensure timely deposits
5. Not updating employee exits: When an employee leaves, their exit date must be updated on both EPFO and ESIC portals. Failing to do so means you continue paying contributions for a person who is no longer employed
6. Ignoring Aadhaar seeding: UAN must be linked with Aadhaar for all employees. Unseeded accounts create issues with transfers, withdrawals, and compliance audits
7. Not filing ESI half yearly returns: Many employers file monthly contributions but forget the half yearly Form 5 return, which carries separate penalties

PF and ESI Compliance Calendar

Use this annual compliance calendar to track all PF and ESI deadlines throughout the year.

Cost of PF and ESI Registration

The registration itself is free of charge on both the EPFO and ESIC portals. However, there are associated costs that employers should budget for.

How to Choose a PF and ESI Compliance Partner

Most small and mid sized businesses outsource PF and ESI compliance to a Chartered Accountant, Company Secretary, or payroll service provider. Here is what to look for when choosing a compliance partner.

• Experience with your industry: A partner who has handled PF and ESI for companies in your sector will understand industry specific wage structuring and compliance nuances
• Payroll software integration: Ensure the partner can work with your existing payroll system or provides their own software for seamless data flow
• Timely filing track record: Ask for references and check their record on meeting monthly filing deadlines
• Inspection and audit support: Your partner should represent you during EPFO and ESIC inspections and handle any compliance notices
• Employee support: A good partner handles employee queries about PF balance, transfers, withdrawals, and ESI card generation

Conclusion

PF and ESI registration is a mandatory statutory obligation for employers who cross the employee threshold in India. The process is entirely online through the EPFO and ESIC portals and can be completed in 3 to 7 working days with proper documentation. The key steps are: checking your eligibility, gathering all establishment and employee documents, registering on both portals, enrolling employees, calculating contributions accurately, and filing monthly returns by the 15th of every month.

The consequences of non compliance are severe, including interest at 12 percent per annum, damages of up to 25 percent, and criminal prosecution against directors and partners. Set up a systematic compliance calendar, use payroll software for accurate calculations, and consider engaging a professional compliance partner to handle monthly filings.

PF and ESI are not just legal requirements. They are a demonstration of your commitment to employee welfare. Companies that provide robust social security benefits attract better talent, have higher employee retention, and build a stronger employer brand in the long run.

If you need professional help with PF registration, ESI registration, or ongoing payroll compliance, our team at IncorpX can handle the entire process end to end, so you can focus on growing your business.