The Employees' State Insurance scheme, run by the Employees' State Insurance Corporation (ESIC), provides medical care and cash benefits for sickness, maternity, disablement and dependants. The ESI Act, 1948 is now subsumed into the Code on Social Security, 2020; the scheme and ESIC portal continue to operate.
Coverage
- Establishments: generally factories and specified establishments (including shops and offices in most states) with 10 or more employees, located in areas ESIC has notified. Coverage has expanded district by district, so check the ESIC list for your location.
- Employees: those whose gross monthly wages are up to ₹21,000 (₹25,000 for persons with disability).
Contribution rates
| Party | Rate on gross wages |
|---|---|
| Employer | 3.25% |
| Employee | 0.75% |
Employees whose average daily wage is up to ₹176 do not pay the employee share; the employer still contributes.
Contribution periods matter
ESI works in two six-month contribution periods (April–September and October–March). An employee who is covered at the start of a period stays covered for that whole period even if a raise takes them above ₹21,000 mid-period. This is the most common source of errors after a salary revision — check the period before stopping deductions.
Monthly process
- Register new employees on the ESIC portal so they receive an insurance number and can access benefits from joining.
- File the monthly contribution and pay by the 15th of the following month.
- Report accidents and maintain the registers the scheme requires.
Remote and multi-state teams
Coverage follows where the employee works. A distributed team can span covered and uncovered areas; your HR record needs each employee's actual work location, not just the head office address.
Sources and review date
Facts in this article were checked against the official sources below as of 8 October 2026. Rates, wage ceilings, due dates and forms change by notification, so confirm on the source before acting.
- ESIC (esic.gov.in)
- Labour Codes page, Ministry of Labour & Employment
- India Code (indiacode.nic.in) — official text of central Acts
This is a general explainer written by the Kyrospect editorial team, not legal, tax or payroll advice. Applicability depends on your state, headcount, establishment type and contracts — confirm with a qualified professional or the authority concerned.
Where Kyrospect fits: Kyrospect HRMS holds employee records and Tracking records shift hours on the same identity. It does not calculate or file PF, ESI, professional tax, TDS or gratuity today — payroll is planned and gated on statutory compliance work. See the roadmap for current status.