EPF & ESI Settings — Tazk Payroll Help

Overview

EPF (Employees' Provident Fund) is a government-mandated retirement savings scheme where both employer and employee contribute a percentage of salary every month. ESI (Employees' State Insurance) is a social security scheme providing medical and cash benefits to employees earning below a wage ceiling. Configure both under Configuration → EPF Settings and Configuration → ESI Settings.

EPF Settings

PF Status — Enabled / Disabled
EPFO Establishment ID / PF Code — PF registration code (used for ECR/Challan)
Rate Category — Statutory rate (e.g., 12% standard; 10% for less than 20 employees or certain industries)
Wage Ceiling — Maximum wage for PF calculation (e.g., ₹15,000). Check International Worker: ignore ceiling if applicable.
Contribution Basis — Ceiling only (cap PF wage at ceiling) or Actual PF wages (higher wages)
Rounding — Nearest rupee (recommended)
View Change History — View past effective-dated versions

Policy Summary

Employee EPF Rate — 12% — Employee contribution (EPF A/c I). Can pay higher (VPF) optionally.
Employer EPS Rate — 8.33% — Paid out of employer share; not recovered from employee.
Employer EDLI Rate — 0.5% — Employer pays EDLI; no employee deduction.

Update EPF Settings

EPF Settings form showing registration details, statutory rates, wage ceiling, contribution basis, and rounding options

1) EPFO Registration

PF Enabled — Toggle on/off (when off, payroll shows zero statutory for all employees)
Establishment Name — Display name for statutory screens and exports
EPFO Establishment ID / PF Code — PF Code as per EPFO Unified Portal
Coverage / Applicability Start Date — Date from which the establishment is covered under EPF & MP Act
ECR Filing Due Date — Monthly contribution due date (e.g., On or before 15th of every month)

2) Statutory Rates & Policies

Statutory Rate Category, Wage Ceiling, Contribution Basis, Rounding
Establishment Exemption Status — Check if exempted under PF Scheme or EDLI Scheme

Live Policy Preview

Shows computed Employee EPF Rate, Employer EPS Rate, and Employer EDLI Rate based on current settings.

PF Wage Builder

Toggle which earning components count as PF wages. Each row shows Component (name & code), Type (Earning), and Include in PF wages? checkbox. Use + Add Component to add or the delete icon to remove. Click Save or Cancel.

Note: EPF is mandatory for establishments with 20 or more employees. The 12% standard rate applies to most organizations; 10% applies to establishments with less than 20 employees or certain notified industries.

Tip: Use the Live Policy Preview to verify EPF/EPS/EDLI rates before saving. If your organization has international workers, check the "ignore ceiling" option to apply PF on full wages.

How EPF Works in Payroll

EPF is configured once per company. When PF is enabled, the system automatically deducts the employee's 12% contribution and computes the employer's EPS (8.33%) and EDLI (0.5%) share every month during salary processing. These amounts are reflected in the payslip and used for ECR/challan filing.

ESI Settings

ESI Status — Enabled / Disabled

Update ESI Settings

ESI Settings form showing registration details, coverage and rates, wage ceiling, exemption thresholds, and rounding options

Changes create a new effective-dated version from the selected Effective From Month.

1) Registration & Compliance

ESI Enabled — Toggle on/off (when off, ESI contributions become 0 for all employees)
Company / Establishment Name — Used in statutory screens, export labels, and compliance registers
ESIC Employer Code Number — ESIC registration number (used for challans / online filings)
Coverage / Applicability Start Date — Date from which ESI coverage started
Monthly payment due date — e.g., Within 15 days of the following month
Contribution period concept — e.g., Apr-Sep & Oct-Mar. Coverage continues till end of contribution period if wages cross the ceiling after the period begins.

2) Coverage & Rates

Wage ceiling (Monthly) for ESI coverage — e.g., ₹21,000. Check Continue coverage till end of contribution period (if crossed later) if applicable.
Persons with Disability (PWD) wage limit — e.g., ₹25,000. Check Apply 'No wage ceiling for PWD' mode if applicable.
Employer rate (%) — e.g., 3.25%
Employee rate (%) — e.g., 0.75% (Total contribution is 4.00% per ESIC employer guidance)
Employee-share exemption threshold (daily average wage) — e.g., ₹176. Check Apply EE exemption (EE share = 0 if daily avg ≤ threshold). If daily average wage is up to the threshold, employee's share is not deducted; employer still pays employer share.
Rounding — Next higher rupee (ceil)

Live Policy Preview

Coverage Ceiling (Standard) — e.g., ₹21,000
ER / EE Rates — e.g., 3.25% / 0.75%
Daily Avg Exemption — e.g., ₹176/day (if applicable, EE share becomes 0)

ESI Wage Builder

Decide which earnings count for (1) coverage threshold (wage ceiling check) and (2) contribution wages (base used to compute ESI %). Each row shows:

Component (name & code), Type (Earning)
Include for Coverage Threshold? — Yes / No
Include for Contribution Wages? — Yes / No

Use + Add Component to add or the delete icon to remove. Click Save or Cancel.

Note: ESI applies to employees earning up to the wage ceiling (currently ₹21,000/month). Once an employee crosses the ceiling mid-contribution period, coverage continues till the end of that period (Apr-Sep or Oct-Mar).

How ESI Works in Payroll

ESI is computed monthly for eligible employees (wages up to the ceiling) when you click Process Salary. The employer and employee contributions are calculated based on the rates configured in ESI Settings and deducted from the processed salary.

Important: Ensure the ESIC Employer Code Number is correct — it is used for online challan filings. An incorrect code can cause payment mismatches with ESIC records.