PF ceiling raised: how much more does each employee cost?
With the wage ceiling raised from ₹15,000 to ₹25,000, employer PF for staff whose basic + DA is ₹25,000 or more rose from ₹1,800 to ₹3,000 a month (up to +67%).
Read original →ESSENTIALS
Essentials before you hire in India
Every rule comes with its source and date, marked Official or Example.
Know this before you hire in India
- Since 21 Nov 2025 labour law sits in four codes, but the real rules are those of the state where your site is
- If basic + DA is under 50% of total pay, the shortfall is treated as wages
- PF ceiling ₹25,000 (from 17 Sep 2026), ESIC for ₹21,000 or less; both due on the 15th every month
- Final settlement for leavers within 2 working days; salaries before the 7th of the next month
- Staff seconded from Korea get 5 years' exemption from Indian PF with a National Pension certificate of coverage
Obligations by headcount at a glance (10, 20, 50, 100, 300)
Under Indian labour law, new duties kick in each time headcount grows. Look at these lines first when planning hires.
Read original →How the four labour codes are organised
The Code on Wages (2019) and the Industrial Relations, Social Security and Occupational Safety codes (2020) replaced the 29 earlier laws.
Read original →The 50% wage rule
Wages are basic pay, DA and retaining allowance. If the 11 excluded items, such as HRA, overtime and commission, add up to more than 50% of total pay, the excess is added back to wages.
Read original →PF and ESIC rates and thresholds
PF is 12% each from employee and employer, ceiling ₹25,000. ESIC applies at ₹21,000 a month or less: employee 0.75%, employer 3.25%.
Read original →Gratuity
Last wage × 15/26 × years of service. 5 years for permanent staff; fixed-term staff get it pro rata after 1 year. Capped at ₹20 lakh.
Read original →Working hours & overtime
8 hours a day, 48 a week; overtime needs consent, double the ordinary wage and records. Rules allow up to 12 hours a day including breaks.
Read original →300-worker dismissal permission and the reskilling fund
Factories, mines and plantations with 300+ need government permission for lay-off, retrenchment or closure. Retrenchment compensation is 15 days per year of service, plus a separate 15 days to the reskilling fund.
Read original →Rules on contract and agency labour
With 50+ contract workers in the past 12 months you need registration and a licence. If a subcontractor fails to pay wages within 7 days, the principal employer may have to pay.
Read original →POSH: prevention of sexual harassment
Every workplace with 10+ staff needs an Internal Committee, a written policy, annual training and an annual report. Breaches cost ₹50,000; repeats double the fine and can cancel the licence.
Read original →Maternity protection
Maternity benefit up to 26 weeks (up to 8 weeks before birth), 6 weeks for miscarriage, 2 weeks for tubectomy, and 1 extra month for complications.
Read original →Employment visa & FRRO
Annual pay above US$25,000, skilled staff, sponsored by an India-registered company. Visas over 180 days need FRRO registration within 14 days of arrival.
Read original →Korea–India Social Security Agreement
Staff seconded by a Korean company for up to 5 years are exempt from Indian PF once the National Pension certificate of coverage is submitted to EPFO. It can be extended if both countries agree.
Read original →Professional tax (PT)
A state tax of up to ₹2,500 per person a year. Maharashtra exempts women; Tamil Nadu collects it half-yearly.
Read original →Strike notice duty
At every industrial establishment, strikes need written notice at least 14 days and within 60 days ahead. They're banned during conciliation or adjudication and for a period after.
Read original →AI
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