Both are mandatory social security schemes, but they serve different purposes. Here's a clear comparison.
EPFO and ESI are India's two largest social security programmes for organised sector workers. While they often apply to the same establishment, they serve fundamentally different purposes.
EPFO: Retirement savings
The Employees' Provident Fund Organisation manages retirement savings. Both employer and employee contribute 12% of basic wages, building a corpus the employee can access on retirement, resignation, or for specific needs like housing.
ESI: Health and disability cover
The Employee State Insurance Corporation provides medical, sickness, maternity, and disability benefits. The employer contributes 3.25% and the employee 0.75% of wages. Benefits include cashless hospitalisation at ESI hospitals and dispensaries.
Applicability thresholds
EPFO applies to establishments with 20+ employees (10+ for certain industries). ESI applies to establishments with 10+ employees where employees earn up to ₹21,000 per month.
An establishment can be covered under both EPFO and ESI simultaneously. In fact, most establishments with 20+ employees are required to comply with both.
Filing differences
EPFO requires monthly ECR filing by the 15th. ESI requires monthly contribution payment by the 15th and half-yearly returns. Both have separate portals and registration processes.