Provident fund is designed to encouraged savings among employees. PF (Provident Fund) or EPF is also called the Employee Provident Fund Scheme. Employees pays a portion of their monthly salary (12% of basic pay) to the fund. Employers also contribute to this corpus, amount matching to employee’s contribution. Total of employee and employer contributions forms a total corpus.
Employee State Insurance Corporation or ESIC is a self-financing social security and health insurance scheme. This Scheme provides medical, sickness, maternity, disablement and various other benefits to the employees.
Establishments that have 10 or more employees and wages are up to Rs.15,000 a month, are required to be registered for ESIC under the ESI Act 1948. This registration has to be taken within 15 days of applicability of this act.
ESI is an autonomous corporation under Ministry of Labour and Employment, Government of India. Covered employees and employers make contributions to this scheme. At present, covered employees contribute 1.75% on contrast employers contribute 4.75% of the wages. The state government also contribute 1/8th share cost of medical benefit.