PF, ESI, TDS: A Plain-English Payroll Compliance Guide for Indian Founders
Mastering 2026 Rates, Deadlines, and Penalty Avoidance
Running a startup in India means juggling growth and compliance. Get PF, ESI, or TDS wrong, and you risk penalties or notices from EPFO and ESIC. This guide simplifies these core components so you can scale with confidence.
1. Employee Provident Fund (PF)
The PF is a government-backed retirement safety net where both you and your employee contribute monthly.
PF Quick Facts (2026)
- Mandatory for: Establishments with 20+ employees.
- Contribution: 12% of Basic + DA from both parties.
- Threshold: Mandatory for employees earning ≤ ₹15,000/month.
| Deadline | Action Required |
|---|---|
| 15th of Every Month | Deposit PF Amount |
| Monthly | File ECR via EPFO Portal |
2. Employees’ State Insurance (ESI)
ESI provides medical, maternity, and disability benefits to employees and their families.
3. TDS on Salary
TDS is the income tax you deduct from an employee’s pay before disbursing it.
2026 Deduction Thresholds
Deduct tax when estimated annual income exceeds:
- New Tax Regime: ₹3 Lakh (Standard deduction ₹75,000 applies)
- Old Tax Regime: ₹2.5 Lakh
Pro-Tip: Collect investment proofs (80C, Rent Receipts) before December to ensure accurate monthly deductions.
Master Your 2026 Payroll Compliance
Need a ready-to-use checklist or a managed compliance workflow?
Contact CSII India