ESI (ESIC)
Coverage, the ₹21,000 limit, 0.75% + 3.25% rates and benefits.
Key facts
- ESI applies to establishments with 10 or more employees. Under the Code on Social Security it covers all of India, not just notified areas.
- Employees earning up to ₹21,000 a month (₹25,000 for persons with disability) are covered.
- Employee contribution: 0.75% of gross wages. Employer contribution: 3.25%. Employees with average daily wages up to ₹176 don't pay their share.
- Deposit by the 15th of the following month. Late payment attracts 12% annual interest plus damages.
- Contribution periods are April–September and October–March. An employee covered at the start of a period stays covered for the whole period even if wages rise.
- Benefits: full medical care for the employee and family, sickness benefit (70% of wages), maternity benefit (26 weeks), disablement and dependants' benefit, and unemployment allowance.
Common questions
What is the ESI wage limit?
₹21,000 a month gross wages (₹25,000 for employees with a disability). Employees above this are not covered. A proposal to raise it has been discussed, but ₹21,000 still applies.
What are the ESI contribution rates?
Employee 0.75% and employer 3.25% of gross wages, paid by the 15th of the next month.
What is the ESI due date?
ESI contributions for a month are due by the 15th of the following month, paid online on the ESIC portal. Late payment attracts 12% annual interest and damages.
When is ESI registration required?
When an establishment has 10 or more employees. Under the Code on Social Security, ESI now applies across India; smaller units can opt in voluntarily.
What if an employee's salary goes above ₹21,000 in the middle of the year?
They remain covered until the end of the current contribution period (September or March), and contributions continue on actual wages for that period.