PF, ESIC and bonus for security guards under the labour codes
The 50% wage rule, the new ₹25,000 EPF ceiling, ESIC, bonus and gratuity, in one payslip. Change the salary structure and see take-home pay and your cost update.
One guard, one month
Defaults are the central sphere Area A unarmed rate: ₹26,624 a month (basic ₹16,562 + VDA ₹10,062). Your inputs are saved on this device.
Conveyance, overtime, special allowance etc.
Used for the bonus base. Default: Area A unarmed, central sphere.
Excludes professional tax, TDS and labour welfare fund, which vary by state. PF admin has a minimum of ₹500 per establishment per month. Bonus and gratuity are shown as monthly provisions.
What the ₹25,000 EPF ceiling did to this payslip
Same salary inputs, old ₹15,000 ceiling vs new ₹25,000 ceiling. Mandatory contribution per side went from a maximum of ₹1,800 to ₹3,000.
This switch also changes the simulator above.
The six rules behind the numbers
The 50% wage rule
“Wages” means basic + DA + retaining allowance. If HRA, conveyance, overtime and other excluded items together exceed 50% of total pay, the excess is added back to wages for PF, gratuity and bonus. The Ministry’s 16 Mar 2026 FAQ says overtime counts toward the 50% test.
EPF ceiling: ₹25,000
S.O. 5109(E) dated 17 Sep 2026 raised the ceiling from ₹15,000, effective on publication. Employee and employer each pay 12% of PF wages. From the employer’s 12%, 8.33% (max ₹2,082.50) goes to EPS and the rest to EPF. EDLI 0.5% and admin 0.5% on top.
ESIC: ₹21,000 threshold
ESIC applies when gross wages are ₹21,000 a month or less. Employee pays 0.75% and employer 3.25% of gross wages. The EPF notification did not change this threshold.
Bonus
Eligible if wages are ₹21,000 a month or less. Calculated on ₹7,000 or the applicable minimum wage, whichever is higher, at 8.33% to 20% a year. Rules notified 25 Aug 2026, effective from 21 Nov 2025.
Gratuity for fixed-term staff
Fixed-term employees qualify after 1 year of continuous service; permanent staff after 5 years. Gratuity is 15 days’ wages per year of service, about 4.81% of annual wages as a provision.
Principal employer liability
Contract labour rules now sit in the OSH Code. If the contractor (your agency) defaults on statutory dues, the principal employer (your client) remains responsible. Expect clients to ask for proof of PF and ESIC payments.
Payroll questions agencies ask
Is PF mandatory on wages above ₹25,000?
No. Mandatory PF is on wages up to ₹25,000 a month from 17 Sep 2026. Contributing on higher wages is optional.
Does ESIC apply to a guard earning ₹26,624 a month?
No. ESIC applies only when gross wages are ₹21,000 a month or less.
Does HRA count toward PF wages?
Not by itself. But if HRA and other excluded allowances exceed 50% of total pay, the excess is added back to wages for PF, gratuity and bonus.
When is a fixed-term guard entitled to gratuity?
After 1 year of continuous service, at 15 days’ wages per year of service.
What is the maximum EPS contribution?
8.33% of wages up to the ₹25,000 ceiling, which is ₹2,082.50 a month. The rest of the employer’s 12% goes to EPF.