{"id":51807,"date":"2023-01-18T12:07:12","date_gmt":"2023-01-18T06:37:12","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=51807"},"modified":"2023-01-18T12:07:14","modified_gmt":"2023-01-18T06:37:14","slug":"major-difference-between-esi-and-epf-registration","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/major-difference-between-esi-and-epf-registration\/","title":{"rendered":"What Is The Difference Between ESI And EPF Registration?"},"content":{"rendered":"\n<p>Every\ncooperate operation, including payroll, is governed by a set of rules &amp;\nregulations. If you have been managing your employees\u2019 payroll in India for a\nwhile, you have probably heard <strong><em>of EPF (Employee Provident Fund) Scheme and\n(ESIC) Employees\u2019 State Insurance Corporation Scheme<\/em><\/strong>. In India, ESI and\nEPF are 2 vital social security schemes that are available to the working\nclass. Both schemes were introduced to improve the living conditions of the\nworking class in India. The Ministry of Labour &amp; Employment regulates both\nof these schemes.<\/p>\n\n\n\n<p>In\nthese schemes, the employer contributes an amount in proportion to the salary\nof the employee &amp; then the total is deposited into the employee\u2019s account.\nHowever, there is a difference between the ESI and <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/epf-registration\">EPF Registration<\/a><\/strong> &amp; they serve\ndifferent purposes.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/major-difference-between-esi-and-epf-registration\/#What_Is_The_Meaning_Of_ESI_And_EPF\" >What Is The\nMeaning Of ESI And EPF?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/major-difference-between-esi-and-epf-registration\/#How_Are_ESI_And_EPF_Applicable\" >How Are ESI And\nEPF Applicable?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/major-difference-between-esi-and-epf-registration\/#Eligibility_Criteria_for_ESI_and_EPF_Registration\" >Eligibility\nCriteria for ESI and EPF Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/major-difference-between-esi-and-epf-registration\/#Penalties_If_the_Business_Fails_To_Meet_the_ESI_and_EPF_Requirements\" >Penalties If the\nBusiness Fails To Meet the ESI and EPF Requirements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/major-difference-between-esi-and-epf-registration\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_The_Meaning_Of_ESI_And_EPF\"><\/span>What Is The\nMeaning Of ESI And EPF?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong>EPF<\/strong>:\nEPF or Employees\u2019 Provident Fund is a Scheme introduced for a bright &amp; better\nfuture for the employees. Under the EPF Scheme, a small amount of your employee\u2019s\nwages is deducted &amp; contributed to the EPF account. Being an employer, you\nhave to match the same amount put in the employee &amp; deposit in the whole\namount in the EPF account. Further, it is linked to the ESIC Scheme.<\/li><li><strong>ESIC<\/strong>:\nESIC Scheme is a workers\u2019 compensation plan that provides medical coverage for\nthe insured. Moreover, their dependents are also protected. ESIC provides a\nnumber of financial compensations in the event of disability or wage loss. The\nScheme provides a pension known as dependent benefit to the insured person\u2019s\nfamily members, in the instance of injury or death caused by occupational\ndangers while at work. ESI along with EPF, Professional Tax &amp; TDS are some\nof the most vital payroll compliance.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Are_ESI_And_EPF_Applicable\"><\/span>How Are ESI And\nEPF Applicable?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the applicability of ESI and EPF Schemes in India:<\/p>\n\n\n\n<ul><li><strong>EPF\nApplicability &amp; Contribution<\/strong>: According to the present\nrule, every organisation with 20 or more employees is grateful to register with\nEPF &amp; facilitate employees with EPF benefits. Organisations with less than\n20 employees can also join this programme but on a voluntary basis only.<\/li><\/ul>\n\n\n\n<p><strong><em>The\nAct doesn\u2019t apply to the following:<\/em><\/strong><\/p>\n\n\n\n<ol><li>Employees who get benefits in the\nnature of 16(1)(b) contributory Provident Fund or old age pension as per rules\nframed by the Government 16(1)(b) Establishments under the control of the State\nor Central Government and employees who get benefits in the nature of 16(1)(b)\ncontributory PF or old age pension in accordance with the Rules framed by the\nGovernment.<\/li><li>16(1)(a) Cooperative Societies\nwith fewer than 50 members that operate without the use of electricity.<\/li><li>16(1)(c) Establishments\nestablished under any Central, Provincial, or State Act, as well as employees\nreceiving benefits in the form of contributory pension funds or old age pensions\nas per the Laws.<\/li><li><strong>ESIC\nApplicability<\/strong>: The ESIC Scheme for India is an integrated\nsocial security scheme designed to provide Social Production to organised\nsector workers &amp; their dependents concerning to contingencies like\nmaternity, sickness &amp; death or disability owing to an employment injury or\noccupational hazard.<\/li><\/ol>\n\n\n\n<p><strong>Applicability<\/strong><\/p>\n\n\n\n<ol><li>The system has been expanded to\ninclude hotels, theatres, road-motor transport ventures, stores, restaurants,\nand newspaper establishments employing 20 or more individuals as per Section\n1(5).<\/li><li>Companies &amp; factories\nemploying 20 or more people that are not seasonal &amp; do not use electricity.<\/li><li>Non-seasonal factories that use\npower-in &amp; employ 10 or more individuals.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_Criteria_for_ESI_and_EPF_Registration\"><\/span>Eligibility\nCriteria for ESI and EPF Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the eligibility criteria for ESI and EPF Registration:<\/p>\n\n\n\n<ul><li><strong>Eligibility Criteria for ESI Registration:<\/strong><ul><li>All organisations are listed under the Shops &amp; Establishments Act and Factories Act;<\/li><li>Factories &amp; other businesses must register with the ESI Schemes if they have 10 or more employees;<\/li><li>Employees earning wages not exceeding Rs. 21,000\/month will be covered to check the requirements of ESI Registration.<\/li><\/ul><\/li><li><strong>Eligibility Criteria for EPF Registration:<\/strong><ul><li>Any organisation or factory with at least 20 employees must register with the EPF Scheme;<\/li><li>Company employees who have already registered for the EPF Scheme are automatically eligible for having their PF account opened as of the date of their hiring;<\/li><li>An organisation or company with fewer than 20 employees may voluntarily register;<\/li><li>All employees who get a monthly salary of less than Rs. 15,000 are obliged to deduct &amp; deposit EPF.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalties_If_the_Business_Fails_To_Meet_the_ESI_and_EPF_Requirements\"><\/span>Penalties If the\nBusiness Fails To Meet the ESI and EPF Requirements<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>ESI\nand EPF compliance is much more than just submitting your contribution by the\nmonth&#8217;s end. Your Business might be subject to the following penalties if\nBusiness fails to meet the ESI and EPF Requirements:<\/p>\n\n\n\n<ul><li><strong>For EPF<\/strong>:<ul><li>12% of interest for each delay in contribution;<\/li><\/ul><\/li><li><strong><em>Penalties for late payment contributions are as mentioned below:<\/em><\/strong><ul><li>Delay of up to 2 months \u2013 5% interest per year;<\/li><li>Delay of up to 2-4 months \u2013 10% interest per year;<\/li><li>Delay of up to 4-6 months \u2013 15% interest per year;<\/li><li>Delay of more than 6 months \u2013 25% interest per year.<\/li><\/ul><\/li><li><strong>For ESI<\/strong>: Penalty of 12% per year on each late contribution.<\/li><\/ul>\n\n\n\n<p>Moreover,\nif your Business fails to meet the EPF or ESIC contribution requirement, it\nwill fall under the purview of the IT Act &amp; your Business might be\nrestricted from making future EPF or ESI deposits, which might lead to a\nfailure to get dedication benefits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After\ndiscussing the difference between ESI and EPF, it is clear that <strong>ESI<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.esic.gov.in\/\"><strong>[1]<\/strong><\/a><\/sup>\nScheme was established to provide workers with medical, financial &amp; other\nbenefits. Whereas EPF is a social security scheme that enables employees to set\naside a small amount of their wages for future benefits.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every cooperate operation, including payroll, is governed by a set of rules &amp; regulations. If you have been managing your employees\u2019 payroll in India for a while, you have probably heard of EPF (Employee Provident Fund) Scheme and (ESIC) Employees\u2019 State Insurance Corporation Scheme. In India, ESI and EPF are 2 vital social security schemes [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":51808,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[212],"tags":[3017],"acf":{"service_id":"14"},"authorName":"Karan Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/processed-1-150x150.jpeg","authorDescription":"A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.","postViews":24635,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51807"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=51807"}],"version-history":[{"count":2,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51807\/revisions"}],"predecessor-version":[{"id":51810,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51807\/revisions\/51810"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/51808"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=51807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=51807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=51807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}