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How do PF and ESI apply to hotel staff salaries in India?
Provident Fund (PF) is deducted at 12% of eligible salary for employees of covered establishments, and Employee State Insurance (ESI) applies at 0.75% employee contribution for gross salaries under ₹21,000 per month. Hotel payrolls must compute both every cycle — Flocci's HRMS payroll engine does it automatically.
Hospitality's mix of shift work, half-days and high staff turnover makes manual statutory payroll error-prone. Attendance drives pay; pay drives PF and ESI; and a wrong ESI decision on a ₹20,500 gross salary is a compliance defect, not a rounding error.
Flocci Hotels ERP links the chain: the monthly attendance calendar (Present, Absent, Half-Day, Leave, Official Duty) feeds payroll directly, the engine applies PF at 12% and ESI at 0.75% under the ₹21,000 threshold, and leave approvals update attendance automatically. Statutory rates are configuration, so notification changes don't need code changes. Confirm current thresholds with your compliance advisor.
See this working in the free Flocci Hotels demo