Who pays PF and ESI for contract workers: the agency or the company?
Short answer
The manpower agency, as the direct employer, deducts the employee share of PF and ESI, adds the employer share, deposits both and bills the cost to you. But if the agency defaults, the principal employer can be made to pay and then recover the amount from the agency. Check monthly challans for every worker at your site.
What are the PF and ESI rates?
| Scheme | Employer | Employee | Applies to |
|---|---|---|---|
| EPF (incl. EPS) | 12% | 12% | PF wages (basic + DA). Mandatory up to the wage ceiling, reported raised from Rs 15,000 to Rs 25,000 from 17 Sep 2026; confirm with EPFO |
| EDLI + admin | 0.5% + 0.5% | None | PF wages |
| ESI | 3.25% | 0.75% | Employees earning up to Rs 21,000 a month |
The employer's PF share cannot be deducted from the worker's pay, whatever the contract says.
How do I protect my company?
- Before work starts, collect the agency's PF and ESI establishment codes.
- Every month, ask for the PF ECR and ESI challan showing each worker deployed at your site.
- Match the names and headcount against your attendance register.
- Release the invoice only after you have the challans.
- Keep the records for audits and labour inspections.
Ask any agency, including Lifeline Crew, for a sample invoice before you sign. It should show wages, PF, ESI, the service charge and GST as separate lines.