ESI (Employee State Insurance)
ESI (Employee State Insurance) is a statutory health and social security scheme where the employee contributes 0.75% and the employer contributes 3.25% of gross wages, applicable to employees earning up to ₹21,000 per month (₹25,000 for persons with disabilities).
What is ESI (Employee State Insurance)?
ESI is governed by the ESI Act, 1948 and administered by ESIC. It provides medical, sickness, maternity, and dependent benefits to insured workers. Employers with 10 or more employees (20 in some states) drawing wages up to ₹21,000/month must register and contribute.
Formula: Employee ESI = 0.75% × Gross wages Employer ESI = 3.25% × Gross wages
Example
For an employee with gross wages of ₹18,000: Employee ESI = ₹135 Employer ESI = ₹585 Total contribution = ₹720
How ESI (Employee State Insurance) is used
ESI is deducted from the gross monthly salary and shown on the payslip. Employers file ESI returns half-yearly and remit contributions monthly via the ESIC portal.
ESI (Employee State Insurance) FAQs
What is the ESI wage limit?
Employees earning up to ₹21,000 per month (₹25,000 for persons with disabilities) are covered under ESI.
When does ESI stop applying to an employee?
If an employee crosses the ₹21,000 wage limit during the contribution period (April to September or October to March), ESI continues until the period ends, then stops.
What benefits does ESI provide?
Medical care for self and dependents, sickness benefit (cash), maternity benefit, disablement benefit, dependent benefit, funeral expenses.