What is EPF and ESIC?
Employees’ Provident Fund and Employees’ State Insurance Corporation
EPF and ESIC are the provident fund and health insurance contributions an employer pays for each worker, a key cost in manpower tender pricing.
What are EPF and ESIC?
EPF is the Employees’ Provident Fund, a retirement savings scheme run by the EPFO. ESIC is the Employees’ State Insurance Corporation, which runs a health and social security scheme. Both require contributions from the employer and the employee.
In a manpower contract, the agency is the employer. Its share of EPF and ESIC is a cost it must build into the price, along with the minimum wage.
Employer rates used in costing
Only the employer’s share is added to the cost. The employee’s share is deducted from the worker’s wages.
- EPF: 12% of wages, with a statutory wage ceiling of ₹15,000 a month
- EDLI: 0.5% and EPF administrative charges: 0.5%
- ESIC: 3.25% of gross wages, for employees earning ₹21,000 a month or less
- Statutory bonus, often costed alongside: 8.33% to 20% of wages
Wage base and ceilings
By law, EPF is compulsory on wages up to ₹15,000 a month, but many GeM manpower bids ask for EPF on the full minimum wage. Use the ceiling only if the bid allows it.
ESIC does not apply when gross monthly wages are above ₹21,000. Rates and ceilings change when the law changes, so check them before you price.
Tips for bidders
Show EPF and ESIC as separate lines in the price breakup sheet, worked out on the wage base the bid defines. Keep your EPF and ESIC registrations current, as many bids ask for them as eligibility documents.
Common questions
Common questions about EPF and ESIC in government tenders.
The statutory ceiling is ₹15,000 a month, but many GeM manpower bids ask for EPF on the full minimum wage. Follow the bid’s terms.
ESIC applies to employees whose gross monthly wages are ₹21,000 or less. Above that, the employer’s 3.25% is usually left out of the cost.
Many manpower bids ask for EPF and ESIC registration numbers as eligibility documents. Check the bid’s qualification criteria.
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