Section 2(9) and rule 50
Wage Limit for Coverage
Section 2(9) of the Act leaves out a person whose wages, excluding remuneration for overtime work, exceed the wages prescribed by the Central Government. Rule 50 prescribes the figure.
| Case | Wage limit | What the rule says | Provision |
|---|---|---|---|
| Employee | ₹21,000 a month | The wage limit for coverage of an employee under section 2(9)(b) is twenty-one thousand rupees a month. | Rule 50 |
| Wages cross the limit during a contribution period | Covered till period ends | An employee whose wages (excluding overtime) exceed ₹21,000 a month at any time after, and not before, the beginning of the contribution period continues to be an employee until the end of that period. | Rule 50, first proviso; section 2(9), proviso |
| Employee who is a person with disability | ₹25,000 a month | Under the Persons with Disabilities Act, 1995 and the National Trust Act, 1999, the wage limit for coverage is twenty-five thousand rupees per month. | Rule 50, second proviso |
Calculator
Work Out the ESI Contribution for One Employee
Enter the wages for the month. The calculator tests the wage limit and works out the employer share of 3.25% and the employee share of 0.75%.
Contributions are worked on the wages payable for the wage period; the wage limit is tested without overtime. Each share is rounded up to the next higher rupee, as rule 19 of the Social Security (Central) Rules, 2026 requires (on ₹15,000 of wages: ₹488 and ₹113).
Section 39 and rule 51
Rate of Contribution (Rule 51)
Section 39 of the Act says the contribution has two parts, the employer contribution and the employee contribution, paid at the rates prescribed by the Central Government. Rule 51 fixes one percentage for each, both worked on the wages payable to the employee for the wage period.
The Employees State Insurance (Central) Amendment Rules, 2019, notified by the Ministry of Labour and Employment as G.S.R. 423(E) dated 13 June 2019, changed both percentages with effect from 1 July 2019.
| Item | Figure | What the text says | Provision |
|---|---|---|---|
| Employer contribution | 3.25% | A sum equal to three and one-fourth per cent of the wages payable to an employee. Before 1 July 2019 the rate was four and three-fourth per cent. | Rule 51(a), as amended by G.S.R. 423(E) dated 13.06.2019 |
| Employee contribution | 0.75% | A sum equal to three-fourth per cent of the wages payable to an employee. Before 1 July 2019 the rate was one and three-fourth per cent. | Rule 51(b), as amended by G.S.R. 423(E) dated 13.06.2019 |
| Employer and employee together | 4% | The sum of the two rates. The earlier total was 6.5%. | Rule 51(a) and 51(b) |
| No employee contribution below a daily wage | Up to ₹176 a day | No employee contribution is payable where the average daily wages during a wage period are up to and inclusive of ₹176. Section 42(1) leaves the figure to the Central Government. | Rule 52; ESI Act s.42(1) |
| Employer share for an employee who is a person with disability | Not payable for 3 years | The employer is not required to pay the employer share for up to three years from the commencement of the contribution period; the Central Government reimburses it to the Corporation. | Rule 51A |
| Unit for contributions | Wage period | The wage period is the unit in respect of which all contributions are payable, and they ordinarily fall due on the last day of the wage period. | ESI Act s.39(3) and s.39(4) |
Regulation 4
Contribution Periods and Benefit Periods
| Contribution period | Corresponding benefit period |
|---|---|
| 1 April to 30 September | 1 January of the year following, to 30 June |
| 1 October to 31 March of the year following | 1 July to 31 December |
For a person who becomes an employee for the first time, the first contribution period starts from the date of employment within the contribution period current on that day, and his benefit period starts on the expiry of 9 months from the date of that employment (regulation 4, proviso).
Regulations 26 and 31 to 31C
Payment, Returns, Interest and Damages
| Point | Figure | What the text says | Provision |
|---|---|---|---|
| Time for payment of contributions | 15 days | Within 15 days of the last day of the calendar month in which the contributions fall due. Where a factory or establishment is permanently closed, on the last day of its closure. | Regulation 31 |
| Return of contributions (Form 5) | 42 days | Within 42 days of the termination of the contribution period to which it relates; within 21 days of permanent closure; within 7 days of a requisition from the appropriate office. | Regulation 26(1) |
| Interest on contribution not paid in time | 12% per annum | Simple interest in respect of each day of default or delay. | Regulation 31A; ESI Act s.39(5)(a) |
| Damages, delay of less than 2 months | 5% | Maximum rate, per annum of the amount due. | Regulation 31C |
| Damages, delay of 2 months and above but less than 4 months | 10% | Maximum rate, per annum of the amount due. | Regulation 31C |
| Damages, delay of 4 months and above but less than 6 months | 15% | Maximum rate, per annum of the amount due. | Regulation 31C |
| Damages, delay of 6 months and above | 25% | Maximum rate, per annum of the amount due. | Regulation 31C |
Rules 55 and 56, regulation 103-A
Contribution Conditions for Benefits
| Benefit | Condition | What the text says | Provision |
|---|---|---|---|
| Sickness benefit | 78 days | Contributions payable for not less than seventy-eight days in the corresponding contribution period. Not payable for more than ninety-one days in any two consecutive benefit periods. | Rule 55(1) |
| Daily rate of sickness benefit | 70% | Of the standard benefit rate during the corresponding contribution period, rounded to the next higher rupee. | Rule 55(2) |
| New employee with a contribution period shorter than 156 days | Half the days available | Qualifies if contributions were payable for not less than half the number of days available for working in that contribution period. | Rule 55(1), third proviso |
| Maternity benefit | 70 days | Contributions payable for not less than seventy days in the immediately preceding two consecutive contribution periods. Payable for twenty-six weeks, of which not more than eight weeks before the expected date of confinement. | Rule 56(1) and 56(2) |
| Medical benefit | 78 days | A person for whom contributions were paid for not less than seventy-eight days in a contribution period is entitled to medical benefit till the end of the corresponding benefit period. A first-time insured person is entitled for 3 months. | Regulation 103-A |
If you miss it
Late Fee and Penalty
Interest from the first day of delay
Simple interest at 12% per annum for each day of default or delay in payment of contributions. Regulation 31A · ESI Act s.39(5)(a)
Damages
Up to 5% a year of the amount due for a delay of less than two months, 10% for two to four months, 15% for four to six months and 25% for six months and above. The Code allows damages up to the amount of arrears, after a hearing. Regulation 31C · Code on Social Security 2020 s.128
Contribution not paid
Failure to pay a contribution is punishable with imprisonment up to three years: not less than one year and a fine of ₹1,00,000 where the employee share deducted from wages is not paid, and not less than two months (up to six months) and a fine of ₹50,000 in any other case. Deducting the employer share from wages is punishable with a fine of up to ₹50,000. Code on Social Security 2020 · s.133
Worked examples
What You Pay in Common Cases
Wages ₹12,000 a month
Employer share, 3.25%₹390
Employee share, 0.75%, deducted from wages₹90
Paid for the month₹480
Wages ₹20,000 a month
Employer share, 3.25%₹650
Employee share, 0.75%₹150
Paid for the month₹800
Wages ₹4,000 a month, average daily wages below ₹176
Employer share, 3.25%₹130
Employee share, rule 52Nil
Paid for the month₹130
Employee with disability, wages ₹24,000, first year
Employer share, rule 51ANot payable by the employer
Employee share, 0.75%₹180
Paid by the employer for the month₹180
Procedure
How to Apply and Pay
- 1Register the employeeBefore or on the day of employment, enter the name, Aadhaar number and other details on the portal; an insurance number is allotted at once (rule 18(1) of the 2026 Rules).
- 2Complete the declarationUpdate the employee and family particulars on the declaration form within thirty days, or the insurance number becomes invalid (rule 18(2) and 18(3)).
- 3Deduct the employee shareOnly from the wages of the period it relates to (section 40(2)); no deduction where average daily wages are up to ₹176 (rule 52).
- 4Pay by the 15thPay both shares within 15 days of the last day of the calendar month in which they fall due (regulation 31).
- 5File the return of contributionsWithin 42 days of the end of the contribution period (regulation 26(1)).
Practical
How to Use This Chart
- Test coverage on monthly wages without overtime: up to ₹21,000, or ₹25,000 for a person with disability.
- An employee whose wages cross the limit in the middle of a contribution period stays covered till that period ends.
- Deposit contributions within 15 days of the end of the calendar month; interest at 12% a year runs for each day of delay.
- Work the contribution on the wages payable for the wage period: 3.25% from the employer and 0.75% from the employee. No employee share is deducted where average daily wages are up to ₹176, but the employer share is still payable.
Not shown on this page
- The consolidated ESIC copy of the Central Rules, marked as on 25 August 2023, still prints rule 51 with the earlier 4.75% and 1.75%. The rates on this page come from the amending notification G.S.R. 423(E) dated 13 June 2019 and from the ESIC Contribution page (last reviewed by ESIC on 4 April 2025). A change of rate notified after that is not included.
- The classes of establishments to which the Act is extended, and the employee-count threshold for them, are fixed by notification and are not shown. The Act itself defines a factory as premises where ten or more persons are employed (section 2(12)).
- Rates of disablement, dependants and other benefits are not covered beyond the conditions listed.
- The Social Security (Central) Rules, 2026 (G.S.R. 344(E) dated 8 May 2026, made under the Code on Social Security, 2020) are on file and supersede the ESI (Central) Rules, 1950. Rule 19 of the 2026 Rules keeps the employer share at 3.25% and the employee share at 0.75% (each rounded to the next higher rupee) and rule 19(2) carries the three-year relief for employees with disability. The 2026 Rules do not print the wage limit of ₹21,000 or ₹25,000 or the daily wage of ₹176; the notification that fixes them under the Code is not on file, so the figures of rules 50 and 52 of the 1950 Rules are shown as the ESIC page still states them.
- Section 164 of the Code repeals the ESI Act and keeps the regulations made under it in force for one year from the commencement of the Code, to the extent not inconsistent with the Code. The commencement notification of the Code and the rate of interest notified under section 127 are not on file.
- The texts read are the ESIC copies: Act updated on 08.08.2024, Central Rules as on 25.08.2023 (amended up to G.S.R. 536(E) dated 25 July 2023) and General Regulations as on 11.01.2024. Later amendments are not included.
Official documents behind this page
- Employees State Insurance Act, 1948 (ESIC copy, updated on 08.08.2024)Section 2(9) (wage limit left to the Central Government), section 2(12) (factory: ten or more persons), section 39 (contributions, wage period, interest at twelve per cent), section 40 (principal employer pays both shares; employee share recovered only from the wages of the period; employer share not recoverable from the employee), section 42(1) (no employee contribution below the prescribed daily wage).
- Employees State Insurance (Central) Rules, 1950 (ESIC copy, as on 25.08.2023)Rule 50 (₹21,000 and ₹25,000), rule 51A (employer share for persons with disability), rule 52 (₹176), rule 55 (sickness benefit: 78 days, 70%, 91 days), rule 56 (maternity benefit: 70 days, twenty-six weeks). Rule 51 in this copy prints the pre-2019 percentages and was not used for the rates.
- Employees State Insurance (Central) Amendment Rules, 2019: G.S.R. 423(E) dated 13 June 2019, Gazette of India Extraordinary, Part II, Section 3(i), No. 356 (F. No. S-38012/01/2016-SS-I)Rule 51(a): three and one-fourth per cent of the wages in place of four and three-fourth per cent. Rule 51(b): three-fourth per cent of the wages in place of one and three-fourth per cent. In force from 1 July 2019.
- ESIC website, Contribution page (esic.gov.in/contribution, last reviewed 2025-04-04, read on 2 October 2026)Current rates with effect from 01.07.2019: employee 0.75% of wages, employer 3.25% of wages; exemption of employees with daily average wage up to ₹176 from the employee share; payment within 15 days.
- Press Information Bureau release of the Ministry of Labour and Employment dated 13 June 2019 (ESIC copy)Reduction of the total rate from 6.5% to 4%, effective 01.07.2019.
- Social Security (Central) Rules, 2026, Ministry of Labour and Employment notification G.S.R. 344(E) dated 8 May 2026 (Gazette of India Extraordinary, Part II, Section 3(i))Preamble (supersession of the ESI (Central) Rules, 1950), rule 18 (registration of employees on the portal before or on the day of employment, declaration within thirty days), rule 19 (employer 3.25% and employee 0.75%, rounded to the next higher rupee; relief for employees with disability).
- Code on Social Security, 2020 (36 of 2020), Gazette of India copySection 127 (interest at the notified rate), section 128 (damages not exceeding the arrears), section 133 (penalty for failure to pay contributions and for deducting the employer share from wages), section 134 (enhanced punishment), section 164 (repeal of the ESI Act; regulations kept in force for one year).
- Employees State Insurance (General) Regulations, 1950 (ESIC copy, as on 11.01.2024)Regulation 4 (contribution and benefit periods), regulation 26 (return of contributions), regulation 31 (payment within 15 days), regulation 31A (interest at 12 per cent), regulation 31C (damages), regulation 103-A (medical benefit).
Disclaimer: This chart reproduces fees and rates from the official documents listed above, as read on 2 October 2026. It is general information, not professional advice for your case. Fees, rates and slabs are changed by notification, and the amount the authority’s portal or challan asks for on the day you pay is the one that applies. The calculator only adds up the figures on this page; it does not know your facts or any later change. TaxClue is not responsible for a decision taken on this page alone. Check the current notification on the official website before you pay or file.