Every employer who employs 20 or more employees will need to compulsorily register under the Employee Provident Fund Act. However an employer may voluntarily register under the Act even if the employee count is lesser than 20. Provident fund in India is governed by Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Employees contribute 12% of their Basic Salary and employers contribute an equivalent amount. To arrive at the count of employees, the count of Contract employees is also to be considered.
Every Employer who employees 10 or more employees will need to compulsorily register under the Employees State Insurance Act. There is no voluntary ESI registration possible and the registration can be obtained only if the employee strength is 10 or more. ESI registration is mandatory even if the employees are not ESI contributing members. Employees contribute 1.75% and Employers contribute 4.75% of Gross Salary. To arrive at the count of employees, the count of Contract employees is also to be considered.
A small contribution from employee and employer to upkeep a fund created for the welfare of employees. Contributions are either half yearly or yearly depending on the State government where the employer is operating. The rates of charges applicable are usually slab based and change from state to state. Any outstanding payments due by employer to employee also to be transferred to the Labour Welfare fund periodically.
Professional Tax – Also called the Employment Tax. This is a tax payable by the employee to the state Commercial Taxes department for employment in the specific state. This tax is governed by the state government and is payable to the State Municipal corporation in some states in India. The Employer is also required to register through a process called Employer Enrolment. The rates of charges payable are usually slab based and change from state to state.