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What is pF ?
Provident Fund (PF) is a savings scheme designed to ensure financial security for employees after retirement. In India, it is managed by the Employees’ Provident Fund Organization (EPFO), requiring both employees and employers to contribute a fixed percentage of the employee’s salary—typically 12% of basic pay. The accumulated funds earn interest, which is credited annually, and employees can withdraw their PF balance upon retirement, job change, or under specific circumstances. Contributions to the PF offer tax benefits under Section 80C of the Income Tax Act, making it an essential tool for promoting savings and providing social security for employees.
What is ESIC ?
ESIC stands for Employee State Insurance Corporation, a social security organization in India that provides financial protection and healthcare benefits to employees in the organized sector. Funded by contributions from both employers and employees, the ESIC scheme offers various benefits such as medical care, maternity benefits, disability benefits, and pensions in case of death or disablement. The scheme aims to provide comprehensive social security and health coverage to employees and their dependents, ensuring that they have access to necessary medical services and financial support during challenging times.
Provident Fund
share of Contribution
Employee : 12% of basic salary and dearness allowance. Employer: 12% of basic salary and dearness allowance, plus additional contributions .
Retirement Planning
PF should be a core part of an employee's retirement strategy, complementing other savings and investment plans.
Emergency Fund
It can act as an emergency fund, providing access to savings during unforeseen circumstances.
Wealth Accumulation
Over time, regular contributions and interest accumulation can lead to significant wealth, benefiting employees in their later years.
Employees' State Insurance Corporation
share of Contribution
Employee :Employees contribute 0.75% of their gross wages (basic pay plus allowances). Employer: Employers contribute 3.25% of the employee’s gross wages.
Applicability
The ESIC scheme applies to employees earning up to a specified wage ceiling (currently ₹21,000 per month for most employees, and ₹25,000 for persons with disabilities).
Benefits
Medical care for employees and their dependents,Maternity benefits for female employees etc.
Importance
ESIC provides crucial financial support during medical emergencies, maternity, and other life events, helping to reduce the burden of healthcare costs.