PF and ESI Compliance Software in India (2026): What to Look For

For most Indian employers, PF and ESI are the part of payroll that hurts when it goes wrong. A mistake in salary is corrected next month. A mistake in a statutory contribution turns into a late-payment interest bill, a notice, or an employee who can't claim a benefit they were entitled to. And in September 2026 the rules moved again: the EPF wage ceiling was raised, and payroll teams across the country are reworking their setups.

This guide explains what PF and ESI compliance software should actually do, what changed in September 2026, and how to judge a tool before you rely on it. It also says plainly where PeopleVio stands, because compliance is the one area where a wrong assumption is expensive.

Rules below are as of 21 September 2026. Statutory rates and ceilings change by notification, so confirm current figures against the official EPFO and ESIC sources before you configure payroll.

What changed in September 2026

The Ministry of Labour and Employment notified a new EPF wage ceiling of ₹25,000 per month under Chapter III of the Code on Social Security, 2020, up from ₹15,000. It was published as notification S.O. 5109(E) on 17 September 2026 and takes effect from the date of publication.

What that means in practice, according to compliance advisories covering the notification:

• Mandatory coverage now extends to wages up to ₹25,000. Employees earning between ₹15,001 and ₹25,000 who were not members before may now need to be enrolled, with a UAN and KYC completed.
• The maximum 12% contribution on the ceiling rises from ₹1,800 to ₹3,000 a month for each of the employee and employer.
• September payroll may need a split-basis calculation, because the change took effect mid-month.
• Employers cannot reduce an employee's wages to absorb the higher contribution.
• Actual treatment depends on the individual's membership status. The ceiling does not automatically mean every employee earning ₹25,000 has ₹3,000 deducted.

Read the notification and your consultant's advice before you change payroll. The point for buyers is simple: any PF tool you choose must let you change the ceiling and the calculation basis without a developer.

What PF and ESI actually require

Provident Fund (PF)

• The employee contributes 12% of PF wages, and the employer contributes a matching 12%, part of which goes to the pension scheme.
• Contributions are filed and paid through the monthly ECR, due by the 15th of the following month.
• Late payment attracts interest and damages, and it can delay employees' claims.
• Under the labour codes in force since 21 November 2025, coverage now applies to establishments with 20 or more employees regardless of industry, and a uniform definition of "wages" affects how the base is calculated.

Employees' State Insurance (ESI)

• The employee contributes 0.75% and the employer 3.25% of gross wages.
• It applies to employees earning up to ₹21,000 a month in gross wages, and the ceiling was unchanged in the sources we checked.
• ESI contributions are also due by the 15th of the following month.
• It generally applies to establishments with 10 or more employees, though thresholds can vary.

Professional Tax and Labour Welfare Fund are state-level, with different slabs and due dates in each state, which is where multi-state employers usually get caught.

What good PF and ESI software should do

1. Calculate contributions from the right wage base, with a configurable ceiling and the ability to contribute on actual basic where you choose to.
2. Handle eligibility per employee, including who is a member, who is newly covered and who is above the ceiling.
3. Generate the ECR file in the format the EPFO portal accepts, and the ESI contribution file for the ESIC portal.
4. Support mid-month changes, such as the September 2026 split, joiners, leavers and unpaid days.
5. Keep UAN and ESI numbers on the employee record, with checks for missing or wrong entries.
6. Reflect state rules for Professional Tax and LWF if you operate in more than one state.
7. Produce records for audits, such as month-wise contribution registers.
8. Update fast when rules change. This one matters more than usual this month.

Questions to ask any vendor

• Can I change the wage ceiling and calculation basis myself, and how quickly did you ship the September 2026 change?
• Do you generate an ECR file that uploads to the EPFO portal directly, or do I re-key it?
• How do you handle an employee who crosses the ceiling mid-year?
• What happens to PF for an employee with unpaid days?
• Which states do you support for Professional Tax and LWF?
• If your tool calculates something wrongly, who is responsible for the correction?

How the main options fit

Platform	PF and ESI fit
greytHR	Long associated with compliance depth in India, a common choice where statutory filings are the priority
Keka	Statutory support suited to mid-size and larger companies, with more setup
Zoho People + Zoho Payroll	Statutory features sit in the separate Zoho Payroll product, so compare the combined cost
HROne	Positioned for larger workforces with compliance needs
PeopleVio	Attendance, leave, payroll and TDS, plus EPFO and ESIC modules that calculate PF and ESI and generate the ECR and ESIC return files. See below

Specific compliance capabilities change often, so treat this table as a starting point and confirm each vendor's current PF and ESI features in a trial with your real salary data.

An honest note on where PeopleVio stands

Updated 29 September 2026: PeopleVio now has EPFO and ESIC modules. With its EPFO and ESIC modules switched on, PeopleVio calculates PF (EPF, EPS, EDLI and VPF) and ESI inside payroll, deducts them on payslips and generates the ECR and ESIC monthly return files; you upload those and pay the challans on the EPFO and ESIC portals.

Around that sits the rest of payroll:

• Configurable salary structures (Basic, HRA, allowances, deductions) and custom pay components for earnings or deductions.
• One-click monthly payroll prorated for attendance, with PDF payslips.
• TDS calculation with old and new regime rules, and employee tax declarations, when an admin enables TDS in company settings.
• Attendance, leave, comp off, expense reimbursements, offer letters, assets and an org chart.

The PF module applies the wage ceiling by effective date (including the ₹25,000 ceiling from 17 September 2026), handles EPS at 58, VPF, loss of pay and mid-month joiners, validates UANs before generating the ECR, supports arrear ECRs, tracks the TRRN and payment, and locks the month once it's paid. The ESIC module applies the contribution-period rule, the disability ceiling and the ₹176 daily-wage exemption, and produces the monthly return as the portal's .xls.

What it doesn't do: it doesn't upload returns or pay challans on the portals (there are no public APIs for that), doesn't generate UANs or IP numbers, and doesn't handle Professional Tax or Labour Welfare Fund. For those, you still need the portals, your accountant or a separate tool.

A worked example: a 40-person company after the September change

Suppose a company has 40 employees, 14 of whom earn between ₹15,001 and ₹25,000.

• Before the change, those 14 were outside mandatory PF, or contributed on ₹15,000 if they had opted in.
• After it, their coverage and contribution base need review. Each newly covered employee needs a UAN, KYC and enrolment.
• September needs a split calculation for the days before and after 17 September, and the contribution is due by 15 October.
• If your tool cannot change the ceiling, you are left with a spreadsheet for these 14 people every month.

This is exactly the situation where the question "can the software adapt quickly?" matters more than any feature list.

Common mistakes with PF and ESI

• Assuming the ceiling is still ₹15,000. Check your configuration for the September 2026 change today.
• Missing the 15th. Interest and damages accrue on late payments, so set a reminder before month end.
• Wrong wage base. With a uniform definition of wages in force, confirm how your salary structure maps to PF wages.
• Forgetting employees near the ESI limit. Someone crossing ₹21,000 changes their ESI status.
• Not updating employee records. Missing UAN or ESI numbers block filings.
• Relying on a vendor's word. Run one parallel payroll cycle and check every contribution against your own calculation.

Frequently asked questions

What is the current EPF wage ceiling? The Ministry of Labour and Employment notified ₹25,000 per month on 17 September 2026 (S.O. 5109(E)), up from ₹15,000. Confirm the notification and any transition guidance with EPFO or your consultant.

Do all employees earning up to ₹25,000 now pay ₹3,000 PF? Not automatically. The maximum 12% contribution on the ceiling is ₹3,000, but actual treatment depends on the individual's membership status and the applicable provisions.

When are PF and ESI due? Both are due by the 15th of the following month. A missed date attracts interest and damages.

What are the ESI contribution rates? The employee pays 0.75% and the employer 3.25% of gross wages, for employees within the ₹21,000 gross wage ceiling, per the sources we checked. Verify current figures with ESIC.

Does PeopleVio calculate PF and ESI? Yes, with the EPFO and ESIC modules switched on. PF, VPF and ESI are calculated in payroll and shown on payslips, and PeopleVio generates the ECR and ESIC monthly return files. You upload them and pay the challans on the portals.

Can PeopleVio calculate TDS? Yes, when an admin turns TDS on in company settings. It uses old and new regime rules and collects employee tax declarations. It doesn't handle surcharge or previous-employer income aggregation.

Is PF mandatory for a company with fewer than 20 employees? Under the labour codes in force, coverage applies to establishments with 20 or more employees, though smaller establishments can opt in voluntarily. Confirm your own position with a consultant.

Should a small company buy payroll software with built-in PF and ESI filing? If you don't have an accountant or consultant handling filings and want to avoid manual work, yes. The cost of a missed or wrong filing is usually higher than the price difference between tools.

The bottom line

PF and ESI are where payroll software earns or loses trust, and the September 2026 ceiling change is a live test of how quickly a vendor adapts. Choose a tool that owns the calculation and the filing files if you want compliance handled inside the software. PeopleVio now calculates PF and ESI inside payroll and generates the filing files, while the upload, the payment and Professional Tax stay with you or your consultant. Whatever you choose, run a parallel cycle and reconcile every contribution before you rely on it.

Want to see how payroll works in PeopleVio? Check the pricing or get in touch and we'll set up a workspace for you.