The framework
Social security in India is now governed by the Code on Social Security, one of the four Labour Codes in force from 21 November 2025. Schemes under the code, such as the provident fund scheme, are notified separately. Draft central rules were issued on 30 December 2025, and state rules also apply.
The main employer obligations are provident fund (administered by EPFO), employees’ state insurance (ESIC) where applicable, and gratuity. EPFO and ESIC registrations can be requested at incorporation through the AGILE form linked to SPICe+.
Check: The sources used for this guide do not state current contribution rates or wage ceilings. Confirm them with EPFO and ESIC, and in the EPF Scheme 2026 text, before setting up payroll.
Provident fund and the EPF Scheme 2026
The EPF Scheme, 2026 was notified on 29 June 2026 (G.S.R. 525(E)) under the Code on Social Security.
International workers
Foreign nationals on Indian payroll are “international workers” under the scheme. The exception is an employee detached to India under a social security agreement between India and the home country, who is excluded. For each expatriate, the employer needs to know which position applies before the first payroll run. See visas and expatriates.
Social security agreements
The India-UK Double Contributions Convention came into force with the India-UK CETA on 15 July 2026. It exempts Indian workers and their employers from dual contributions on temporary UK assignments for up to five years, up from three. Confirm how any agreement applies to staff coming to India before relying on a detachment exemption.
Gratuity
Fixed-term employees get benefits equal to permanent staff and qualify for gratuity after one year of service. Centres that hire on fixed-term contracts should provide for gratuity from the first year.
Gig and platform workers
Gig and platform workers are now covered by social security. Aggregators contribute 1–2% of annual turnover to a social security fund, capped at 5% of the amounts paid or payable to gig and platform workers.
Central hiring incentive: ELI
The Employment Linked Incentive, run as the PM Viksit Bharat Rozgar Yojana, has an outlay of ₹99,446 crore.
| Feature | Terms |
|---|---|
| Employer support | Up to ₹3,000 a month for each additional employee with pay up to ₹1 lakh, for two years |
| Retention | Each additional job must be sustained for at least six months |
| Minimum hiring | At least 2 additional jobs (employers with under 50 staff) or 5 (50 or more) |
| First-time employees | One month’s EPF wage, up to ₹15,000 |
| Window | Jobs created from 1 August 2025 to 31 July 2027 |
State support for payroll and EPF
Several states reimburse employer contributions or subsidise payroll for qualifying projects. Examples from current policies:
| State and policy | Support |
|---|---|
| Maharashtra, Industry, Investment and Services Policy 2025 | 50% of the employer’s EPF contribution for five years, up to ₹5 crore per unit, for units in Groups D and D+ creating more than 20 jobs per ₹1 crore invested |
| Odisha GCC Policy-2025 | 100% of the employer’s ESI and EPF contributions for five years, for employees domiciled in Odisha |
| Gujarat GCC Policy 2025-30 | EPF support of 75–100% for five years |
| Tamil Nadu GCC scheme (G.O.(Ms.) No. 34, 12 Mar 2024) | Payroll subsidy of 30%, 20% and 10% over three years on basic wages of jobs paying ₹1 lakh a month or more, for Tamil Nadu-domiciled employees |
Each policy has eligibility tests, registration steps and lock-in periods. See state incentives and GCC locations.
What to check next
- Confirm current EPF and ESIC contribution rates and wage ceilings with the authorities before the first payroll.
- Classify each expatriate as an international worker or a detached worker under a social security agreement, and keep the evidence.
- Provide for gratuity on fixed-term contracts from the end of the first year of service.
- If the hiring plan adds jobs before 31 July 2027, check ELI eligibility and the six-month retention test.
- Compare state EPF and payroll support with the domicile and job-density conditions attached to it.