Calculate ESI contributions

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See employee + employer ESI contribution per the Employee State Insurance Act. Wage ceiling: ₹21,000 gross / month.

Act 1948 Compliant Live Calculation Visual Breakdown

Employee details

ESI applies when monthly gross is ₹21,000 or less. Employee: 0.75%, Employer: 3.25%, Total 4%.

Monthly gross salary

What ESI covers

Medical care — free treatment for employee + dependents at ESIC hospitals.
Sickness benefit — up to 70% of wages for 91 days/year.
Maternity benefit — 26 weeks paid leave.
Disability + funeral — cover for accident, long-term illness, dependents.
Unemployment allowance — Rajiv Gandhi Shramik Kalyan Yojana scheme.
Wage ceiling — ₹21,000/mo (₹25,000 for disabled workers).

Total monthly ESI

₹720

Total monthly ESI contribution (employee + employer)

Monthly gross₹18,000

Eligible?Yes (gross ≤ ₹21K)

Employee share₹135 (0.75%)

Employer share₹585 (3.25%)

Total per month₹720 (4%)

Annual employee₹1,620

Annual employer₹7,020

How ESI is calculated

ESI is a self-financing social security and health insurance scheme for Indian workers earning ≤ ₹21,000 per month gross.

01
Check eligibility
Monthly gross salary must be ≤ ₹21,000 (₹25,000 for disabled workers).
```
if gross <= 21000: eligible
```
02
Employee share
Employee contributes 0.75% of gross monthly salary.
```
employee = gross × 0.0075
```
03
Employer share
Employer contributes 3.25% of gross. Combined: 4% total per month.
```
employer = gross × 0.0325
total = employee + employer
```

FormulaTotal ESI = Monthly Gross × 4% (0.75% employee + 3.25% employer)Applies only if gross ≤ ₹21,000. Contributions stop once gross exceeds the ceiling (during the contribution period).

Why we use this formula by default.
Indian payroll convention, statutory references, and the SaaS tooling that runs payroll all converge on this approach. Below are the authoritative sources we cross-checked.

Statute

Employees' State Insurance Act, 1948

Primary statute defining contributions, benefits, and coverage.

Regulator

ESIC Portal

Official ESIC corporation portal for benefits and challan filing.

Wage Ceiling

ESI ₹21,000 / ₹25,000 ceiling

Current eligibility threshold (₹25K for disabled workers).

Payroll SaaS

RazorpayX Payroll

Industry-standard ESI calculation and challan generation logic.

Tax Reference

ClearTax ESI Guide

Compliance overview, returns timeline, and penalty structure.

Consultancy

hinote.in

India-specific ESI practice and HR compliance guidance.

FAQs about ESI

Who is covered under ESI?

Employees earning ≤ ₹21,000 gross per month (₹25,000 for disabled) in factories with 10+ employees and establishments with 20+ employees (some states extend to 10+). Both organised and unorganised sectors are included.

What benefits does ESI provide?

Medical care for employee + dependents at ESI hospitals, sickness benefit (up to 70% wages for 91 days/year), maternity benefit (26 weeks), disability benefit, dependents' benefit, funeral expenses, unemployment allowance.

How is ESI different from EPF?

ESI = health + sickness insurance (paid monthly, no withdrawal). EPF = retirement savings (12% + 12%, accumulates with interest, withdrawn at retirement or job change).

What if my salary crosses ₹21K mid-year?

You stay enrolled until the end of the current contribution period (April-September OR October-March). From the next period, ESI stops if you remain above ₹21K.

Do I need to pay ESI as a freelancer?

No. ESI is for salaried employees in registered establishments. Self-employed and freelancers are not covered, but can avail other government schemes like Ayushman Bharat.

Where can I avail ESI treatment?

At ESIC hospitals and dispensaries, plus empaneled private hospitals for specialty treatment. Cashless treatment up to specified limits. Find nearest centre via the ESIC portal.

Are dependents covered?

Yes — spouse, dependent children (up to 25), and dependent parents (if living with employee). Same medical benefits, free of cost.

What if employer doesn't pay ESI?

Penalties + interest at 12% p.a. + possible imprisonment for the employer under Section 85B. Employees can file complaints with the regional ESIC office. Your contributions and benefits are still valid even if the employer is in default.

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Calculate ESI contributions

Employee details

What ESI covers

How ESI is calculated

Check eligibility

Employee share

Employer share

Employees' State Insurance Act, 1948

ESIC Portal

ESI ₹21,000 / ₹25,000 ceiling

RazorpayX Payroll

ClearTax ESI Guide

hinote.in

FAQs about ESI

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