Employee State Insurance (ESI) in India

Q: What is the current ESI contribution rate?

The total ESI contribution is 4% of gross monthly wages: 3.25% paid by the employer and 0.75% deducted from the employee. This rate has been unchanged since July 2019.

Q: What is the ESI wage ceiling?

Employees drawing gross wages up to ₹21,000/month (₹25,000/month for employees with disabilities) are covered under the ESI scheme.

Q: When is the ESI contribution due each month?

Employers must remit both employer and employee contributions by the 15th of the following month through the ESIC portal.

Q: Is ESI applicable across all states in India?

Yes. Unlike Professional Tax or the Labour Welfare Fund, ESI is a central scheme under the ESI Act, 1948, and applies uniformly nationwide. Only the minimum-employee threshold for coverage varies slightly by state.

Q: What happens if an employee's salary crosses ₹21,000 mid-year?

Once covered in a contribution period (April–September or October–March), an employee stays covered under ESI for the rest of that period even if their wages rise above the ceiling. Coverage is reassessed at the start of the next period.

Q: What benefits does ESI provide?

ESI covers sickness, maternity, disablement, and dependants' benefits, along with free medical care for the insured employee and family, and funeral expenses, all funded entirely from the employer and employee contributions.

ESI is a central social security scheme. Unlike Professional Tax or the Labour Welfare Fund, its contribution rates and wage ceiling are the same across every state. Here's the full breakdown: rates, due dates, registration, and benefits.

Updated: 01 August 2026

ESI Contribution Rates

Contributor	Rate	Base
Employer	3.25%	Gross monthly wages
Employee	0.75%	Gross monthly wages
Total	4%	Gross monthly wages

* Wage ceiling for ESI coverage: ₹21,000/month (₹25,000/month for employees with disabilities). Employees earning up to ₹176/day in average wages (employee share only; employer still contributes).

Applicability, Due Dates & Registration

Who It Applies To

Factories and establishments with 10 or more employees (20 or more in a few states, including Maharashtra and Chandigarh) drawing wages up to the ESI wage ceiling.

Due Date

15th of the following month (via the ESIC portal, per Regulation 31 of the ESI (General) Regulations, 1950).

Registration

Employers must register on the ESIC portal within 15 days of the ESI Act becoming applicable to their establishment (i.e., on crossing the employee threshold). Each employee is issued a 17-digit Insurance Number after registration.

ESIC portal ↗

Contribution & Benefit Periods

Contribution: 1 April – 30 September → Benefit: 1 January – 30 June (following year)
Contribution: 1 October – 31 March → Benefit: 1 July – 31 December (same year)

Delayed payment attracts 12% per annum simple interest for every day of default. Non-payment or false representation can also invite prosecution: imprisonment of up to 2 years and a fine of up to ₹5,000 under Section 85 of the Act, along with recovery as arrears of land revenue.

ESI Benefits

Sickness benefit

Cash compensation during certified sickness, generally 70% of average daily wages for up to 91 days a year.

Maternity benefit

Paid leave for confinement, miscarriage, or related illness, up to 26 weeks at full average daily wage.

Disablement benefit

Temporary or permanent disablement compensation, paid as a percentage of wages depending on the degree of disability.

Dependants' benefit

Monthly pension to dependants if an insured employee dies due to an employment injury.

Medical benefit

Free, full medical care for the insured employee and family at ESI dispensaries and hospitals, from the day of entering insurable employment.

Funeral expenses

A lump sum (currently ₹15,000) paid to the family or the person who performs the last rites.

Mannu Matta

Updated on: 01 August 2026

Frequently Asked Questions

What is the current ESI contribution rate?

What is the ESI wage ceiling?

Which establishments must register for ESI?

When is the ESI contribution due each month?

Is ESI applicable across all states in India?

What happens if an employee's salary crosses ₹21,000 mid-year?

What benefits does ESI provide?

Automate ESI compliance across your workforce

Engage HRMS auto-detects ESI eligibility by wage ceiling, deducts contributions every payroll run, and generates ready-to-file challans, alongside PF, PT, and TDS.

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