⭐ 1. PROVIDENT FUND (PF)
PF stands for Provident Fund, also known as EPF (Employees’ Provident Fund).
It is a retirement savings scheme for employees.
✔ Who manages it?
Employees’ Provident Fund Organisation (EPFO).
✔ Who contributes?
Both employee and employer contribute a percentage of the salary.
✔ Contribution Rate
- Employee: 12% of basic salary + DA
- Employer: 12% (8.33% to pension, 3.67% to PF)
✔ Benefits of PF
- Savings for retirement
- Tax-free interest
- Withdrawals allowed during emergencies
- Pension benefits (EPS)
✔ When can PF be withdrawn?
- After retirement
- If unemployed for 2 months
- For marriage, education, home loan, medical needs (partial withdrawal)
⭐ 2. ESIC (Employees’ State Insurance Corporation)
ESIC provides medical and financial benefits to employees and their families in case of illness, injury, pregnancy, or employment-related accidents.
✔ Who manages it?
Employees’ State Insurance Corporation (ESIC).
✔ Who contributes?
Both employer and employee contribute.
✔ Contribution Rate
- Employee: 0.75% of wages
- Employer: 3.25% of wages
(Only applicable if employee’s monthly salary ≤ ₹21,000)
✔ Benefits of ESIC
- Free medical treatment for family
- Sickness benefit (cash compensation during illness)
- Maternity benefit
- Disability benefit
- Dependents benefit (in case of death)
- Funeral expenses
⭐ Difference Between PF and ESIC
| PF (EPF) | ESIC |
|---|---|
| Retirement savings | Medical & insurance support |
| Applicable to establishments with 20+ employees | Applicable to establishments with 10+ employees |
| Long-term savings | Short-term and long-term medical benefits |
| Deducted from salary | Deducted from salary |
| Managed by EPFO | Managed by ESIC |