PF (provident fund) is applicable to all companies with more than 20 employees. It is compulsory for any employee with a salary below ₹15,000. Both the employee and employer need to contribute towards PF, and both contributions are of 12% each. On top of this, there is a 1% charge (0.5% admin charge, 0.5% EDLI charge), which some companies include in an employee's CTC as well. There has been a lot of confusion regarding what components of the salary PF is applied for, but with a recent Supreme Court ruling this has been clarified to include all fixed salary components, excluding HRA.


ESI (employees' state insurance) is applicable to all companies with more than 10 employees, and is applicable only to employees earning less than ₹21,000. The employee and employer contribution are 0.75% and 3.25% respectively. ESI is calculated on total earnings.