ESI eligibility and contribution rates, explained
ESI covers employees earning up to ₹21,000 a month in gross wages. The employee contributes 0.75% and the employer 3.25% of gross wages. For employees with a disability, the wage limit is ₹25,000.
Who is covered
- Employees of covered establishments, typically those with 10 or more employees. Some states set the threshold at 20; check your state’s notification.
- Employees whose gross wages are ₹21,000 a month or less.
Contribution rates
| Who pays | Rate | Example on ₹19,500 |
|---|---|---|
| Employee | 0.75% | ₹147 |
| Employer | 3.25% | ₹634 |
Contributions are rounded up to the next rupee. Employees earning up to ₹176 a day on average are exempt from paying their share, but the employer still pays.
Contribution periods
ESI runs in two six-month periods: April to September and October to March. If an employee is covered at the start of a period, they stay covered until it ends, even if their pay rises above ₹21,000.
What employers must do each month
- Deduct the employee share from wages.
- Pay both shares to ESIC by the 15th of the next month.
- Keep records of wages and contributions for every covered employee.
Check any salary with the PF and ESI calculator, or let Crew payroll work it out every month.
General information, not legal advice. Confirm current rules with ESIC.
Frequently asked questions
What is the ESI wage limit?
₹21,000 a month in gross wages, or ₹25,000 for employees with a disability.
What are the ESI rates?
0.75% from the employee and 3.25% from the employer.
When is ESI due?
By the 15th of the following month.
