ESI Calculation and Applicability explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
ESI provides medical and cash benefits to employees, funded by employer and employee contributions. Here is how ESI applies and is calculated.
Applicability
- Establishments with 10 or more employees (20 in some states)
- Employees earning up to ₹21,000 per month (₹25,000 for persons with disability)
Contribution
- Employer: 3.25% of wages
- Employee: 0.75% of wages
- Deposited monthly by the 15th of the following month
Example
For wages of ₹18,000, the employer contributes ₹585 and the employee ₹135 per month.
Frequently Asked Questions
Who is covered under ESI?
Employees earning up to ₹21,000/month in establishments with 10+ employees.
What is the ESI contribution rate?
3.25% employer and 0.75% employee of wages.
When is ESI deposited?
By the 15th of the following month.
What benefits does ESI give?
Medical, sickness, maternity, disability and dependant benefits.
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