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Business Compliance & Labour Law

PF & ESIC Monthly Returns

PF / ESIC Returns

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Regulatory Framework

Ongoing EPF/ESI compliance for a covered establishment centres on monthly return filing. Under the Employees' Provident Fund Scheme, 1952, the employer must file the Electronic Challan-cum-Return (ECR) each month, reflecting employee-wise wages and contributions, and remit the combined 12% employer and 12% employee contribution (split 3.67% Provident Fund / 8.33% Employees' Pension Scheme, subject to the ₹15,000 wage-ceiling cap of ₹1,250 on the pension component) by the 15th of the following month, consistent with the framework under Section 6 of the EPF Act, 1952, Paragraph 29 of the EPF Scheme, 1952 and Paragraph 3 of the EPS, 1995. Late deposit attracts interest under Section 7Q of the Act (12% per annum) and damages under Section 14B (up to 100% of arrears on a tiered scale).

Under the ESI scheme, the employer must remit contributions (3.25% employer, 0.75% employee, on wages up to the ₹21,000/₹25,000 ceiling per G.S.R. 423(E) dated 13 June 2019) monthly via the ESIC portal under Section 39 of the ESI Act, 1948, and file the half-yearly return of contributions for each ESI contribution period (April-September and October-March).

The four new Labour Codes (Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions) were notified as commenced from 21 November 2025 (PIB PRID 2192463); the central rules operationalising the Codes are expected around May 2026, after which the return-filing framework above will migrate to the corresponding Code provisions.

Overview

PF and ESI returns are the statutory filings of the provident fund and the employees' state insurance — the monthly ECR (electronic challan cum return) for the PF under the Employees' Provident Funds Act 1952 with the contribution details of every employee, the monthly ESI contribution and the returns under the ESI Act 1948, and the annual returns under both the statutes. The returns are where the employer's social security compliance is declared, and they are the records the inspectors read.

The PF and the ESI returns are the monthly declaration of the workforce and its contributions — every employee, every wage, every contribution — and the returns must match the payroll and the bank payments. The ECR is the PF's monthly record; the ESI return is the insurance's monthly record; and the annual returns close the year. The accuracy of the returns is what keeps the contributions and the claims reconciled.

The cost of the wrong returns is the mismatch at the inspection: the contributions paid but not reported, the employees missed from the ECR, the wages mis-stated — each a difference that becomes a demand and a finding. The returns are the cheapest place to be right.

This service is for employers filing PF and ESI returns. We prepare the monthly ECR with the employee and the contribution details, file the ESI returns and the payments, prepare and file the annual returns under both the statutes, reconcile the returns with the payroll and the payments, and keep the filings current so the social security records are the records the inspections expect.

How It Works

  1. 1

    Payroll Data Assembly

    We assemble the payroll and the contribution data for the returns.

    Harun Raaj & Associates does thisMonthly
  2. 2

    ECR Preparation & Filing

    We prepare and file the monthly ECR with the employee details.

    Harun Raaj & Associates does thisMonthly
  3. 3

    ESI Returns & Payment

    We file the ESI returns and the contributions.

    Harun Raaj & Associates does thisMonthly
  4. 4

    Annual Returns

    We prepare and file the annual returns under both the statutes.

    Harun Raaj & Associates does thisAnnual
  5. 5

    Reconciliation

    We reconcile the returns with the payroll and the payments.

    Harun Raaj & Associates does thisMonthly

Frequently Asked Questions

What is the ECR (Electronic Challan cum Return) and how often must it be filed?
The Electronic Challan cum Return (ECR) is the monthly filing mechanism under the Employees' Provident Funds and Miscellaneous Provisions Act 1952 through which employers report member-wise wages, PF contribution amounts, and EPS contributions via the EPFO Unified Shram Suvidha Portal. It must be filed and contributions deposited by the 15th of the month following the wage month under Paragraph 38 of the EPF Scheme 1952 — for example, the ECR for June wages must be filed and payment made by July 15. Delay in filing or payment attracts interest at 12% per annum under Section 7Q of the EPF Act and liquidated damages under Section 14B at rates ranging from 5% to 25% of arrears. The ECR also feeds member passbooks and is the basis for settlement of withdrawal, pension, and EDLI claims, making accuracy critical.
What is Form 6 under the ESI Act and when is it due?
Form 6 is the half-yearly return of contributions under the Employees' State Insurance Act 1948 and is to be filed by the employer with the ESIC regional office under Rule 31 of the ESI (Central) Rules 1950. It contains details of insured persons, their gross wages, and the ESI contributions (employer share 3.25% + employee share 0.75%) for the contribution period. The return is filed twice a year: for the April–September period it is due by November 11, and for the October–March period it is due by May 11. Non-filing of Form 6 by the due date or furnishing false information attracts prosecution under Section 84 of the ESI Act, with a fine of up to ₹2,000 for the first offence and up to ₹4,000 for subsequent offences. Since 2022, ESIC has moved substantially to online return filing through the ESIC portal, reducing paper filing.
What happens if we missed depositing PF contributions for a few months — can we regularise it without prosecution?
Yes, arrears of PF contribution can be regularised by depositing the outstanding amounts along with interest at 12% per annum from the due date under Section 7Q of the Employees' Provident Funds and Miscellaneous Provisions Act 1952. Additionally, liquidated damages under Section 14B are levied by the EPFO at 5% for delays up to two months, 10% for two to four months, 15% for four to six months, and 25% for defaults beyond six months. Voluntary disclosure and payment before an EPFO inspection or Section 7A order significantly improves the employer's position, and the EPFO Assistant PF Commissioner may waive or reduce damages in genuine hardship cases through the damage reduction committee process. Where no fraud or wilful default is involved and the arrears are cleared, prosecution under Section 14(1A) (which carries imprisonment of up to three years) is generally not initiated.
How does an employee claim their PF balance after leaving a company, and what is the employer's obligation?
An employee can claim PF withdrawal or transfer using the EPFO member portal (member.epfindia.gov.in) through online Form 31 (advance/partial withdrawal), Form 19 (final settlement), and Form 10C (EPS withdrawal/scheme certificate) if their UAN is activated and Aadhaar-seeded. The employer's obligation on exit is to update the Date of Exit (DOE) in the EPFO portal within 15 days of the employee leaving service under Paragraph 72(5) of the EPF Scheme 1952; failure to update DOE blocks the employee's online claim. PF accumulated balance including employee's and employer's contributions is not taxable if the employee has completed five continuous years of service under Section 10(12) of the Income Tax Act 1961; premature withdrawal (below five years) is taxable and subject to TDS under Section 192A at 10% (if PAN is furnished) or 20% (if no PAN) on the taxable component.
Are directors or partners of the firm required to be covered under EPF and ESIC?
Working directors of a private limited company who draw a salary and are in an employer-employee relationship with the company may be covered under the Employees' Provident Funds and Miscellaneous Provisions Act 1952, but whole-time directors who control the company and hold substantial equity are generally not treated as employees for EPF purposes — this is determined case-by-case based on the actual nature of the relationship. Partners of a firm (including LLP partners drawing a share of profit, not salary) are not employees and are excluded from EPF coverage under the definition of 'employee' in Section 2(f) of the EPF Act. For ESI, Regulation 3(3) of the ESI (General) Regulations 1950 excludes persons whose pay solely consists of commission or profit-sharing from the definition of 'employee', so a managing director drawing only director commission may not be covered. A salaried working director earning up to ₹21,000 gross per month would ordinarily be covered by ESI, but many ESIC regional offices take differing positions — a specific ruling from the regional office is advisable.

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