PF and ESI registration for manpower contractors

When must a contractor register for PF and ESI?

Since 21 November 2025, PF and ESI are governed by the Code on Social Security, 2020, which replaced the EPF and ESI Acts. Its First Schedule sets when each chapter applies:

Two rules catch contractors out. First, the Code says an establishment to which a chapter applies "shall continue to be applied thereafter even if the number of employees therein at any subsequent time falls below the threshold". Losing a contract and dropping to 15 staff does not take you out of PF. Second, an employer and a majority of employees can agree to join PF or ESI voluntarily below the threshold.

How do you register?

The Code says every establishment it applies to must be registered, electronically or otherwise. An establishment already registered under another central labour law does not need to register again. In practice, EPFO and ESIC employer registration are both done online through the Ministry of Labour's Shram Suvidha portal, which lists EPFO and ESIC registration among its services. Keep your PAN, incorporation or partnership documents, address proof, bank details and the list of employees with their joining dates ready. Check the current steps and documents on the portal before you start, as they change.

How much do you pay?

Provident fund

The Code sets the employer's PF contribution at 10% of wages, with 12% for establishments the government notifies, and the employee contributes a matching share. Up to 8.33% of wages from the employer's share goes to the pension fund. From 17 September 2026 the wage ceiling for PF contributions is "₹25,000 per month or the actual salary/wages, whichever is lower", and the maximum pension contribution is 8.33% of ₹25,000 instead of ₹15,000. Tender costing sheets usually show about 13% for PF, which includes the linked insurance and administration charges; check the current charges with EPFO or your CA.

ESI

ESIC's rates, in force since 1 July 2019, are 3.25% of wages from the employer and 0.75% from the employee. Staff whose average daily wage is up to ₹176 pay no employee share, but the employer still pays its 3.25%. ESIC says contributions are due within 15 days of the end of the month. The Ministry of Labour has confirmed that the ₹21,000 coverage limit continues to apply under the Code for now.

Worked example: one security staff member on ₹18,000

The employer shares (₹2,745 here, before PF charges) are your cost and belong in your rate per post. The employee shares come out of the staff member's wages. Our manpower rate calculator builds them into a quote.

HaazriPro works this out every month from your attendance, for every staff member and site. Start 30-day free trial  →

What is special about contract staff?

The Code has rules written for exactly the contractor situation:

• The principal employer can recover from you. For PF, contributions an employer pays for people employed through a contractor "may be recovered by such employer from the contractor", by deduction from your bills or as a debt (section 17). For ESI, the principal employer pays both shares for workers employed through a contractor and can recover them from you the same way (section 31).
• You may deduct only the employee's share from wages. Deducting the employer's share or charges from a worker's wages is not allowed, "notwithstanding any contract to the contrary".
• You must keep a register of the employees you supply and give it to the principal employer before your ESI amounts are settled (section 31(7)).
• Under the 2026 central OSH rules, all contract labour must be made members of EPFO and ESIC, subject to the Code's applicability, as a licence condition.

What records back up your PF and ESI payments?

A challan proves you paid an amount. It does not prove you paid for the right people. Keep, for every month: the list of staff covered with their PF and ESI numbers, the wages each was paid, the days each worked at which site, and the employee shares you deducted. When a staff member says their PF was not credited, or a client asks why a name on its site is missing from your ESI list, those four records answer the question in minutes. Start them from the attendance record, because days worked drive wages, and wages drive contributions. Our free wages register has columns for each deduction and its nature.

What will your clients ask for?

Because they can be made to pay if you do not, many principal employers ask every month for PF and ESI challans and the list of staff covered, matched to the people deployed at their site. A clean attendance and salary record makes that match easy: the staff who worked are the staff whose contributions you paid. See what the principal employer can ask you for and the wider changes under the Labour Codes.

Sources

• Code on Social Security, 2020: sections 1, 3, 16, 17, 31 and the First Schedule (India Code)
• PIB, 16 Sept 2026: EPF wage ceiling raised to ₹25,000
• PIB, 23 Sept 2026: EPF ceiling and pension contribution details
• ESIC: contribution rates and due date
• ESIC: coverage and wage limit
• Ministry of Labour: additional FAQs on the Labour Codes (16 Mar 2026)
• OSH and Working Conditions (Central) Rules, 2026, rule 93 (eGazette)
• Shram Suvidha portal (Ministry of Labour)

This guide explains the rules in plain language. It is not legal or tax advice. Laws and rates change, so confirm registration, rates and due dates with EPFO, ESIC or your CA before you act on it.