Quick answer: ESI (Employees’ State Insurance) is India’s statutory health and income-protection scheme for lower-paid employees, run by the Employees’ State Insurance Corporation (ESIC). It covers staff earning up to ₹21,000 a month (₹25,000 for persons with disability). You pay 3.25% of their wages and the employee pays 0.75%.
- Contribution rates have stood at 3.25% and 0.75% since 1 July 2019.
- Contributions fall due within 15 days of the end of each calendar month, the same rhythm as your monthly EPF deposit.
- ESIC coverage now extends pan-India under the Code on Social Security, 2020.
- Employees on average daily wages up to ₹176 pay no share, but you still pay yours.
Who must register for ESI in 2026?
Establishments with 10 or more employees (20 in a few states), anywhere in India.
Before the Code on Social Security took effect on 21 November 2025, ESI applied only in notified areas, which left some districts and towns outside it. That limit is gone, as the PIB release on the Labour Codes confirms. Below 10 employees, coverage is voluntary. One employee in a hazardous process makes it compulsory.
Once covered, always covered. An establishment stays inside ESI even if headcount later drops below the threshold, so a small Pune team that shrinks after a restructure keeps filing.
Wages decide. An employee whose pay crosses ₹21,000 during a contribution period stays covered until that period ends.
| Contribution period | Benefit period |
|---|---|
| 1 April to 30 September | 1 January to 30 June of the next year |
| 1 October to 31 March | 1 July to 31 December |
How much ESI do you pay on a salary?
Four per cent of wages in total. You carry 3.25% and the employee 0.75%, the split ESIC’s contribution page has set since July 2019.
Suppose you hire a customer support executive in Pune on ₹20,000 a month. Your esi contribution rate of 3.25% costs ₹650 and the employee’s 0.75% is ₹150, so ₹800 a month goes to ESIC for that employee’s statutory medical and sickness cover. Cheap.
| Monthly wages | Employer 3.25% | Employee 0.75% | Total |
|---|---|---|---|
| ₹18,000 | ₹585 | ₹135 | ₹720 |
| ₹20,000 | ₹650 | ₹150 | ₹800 |
| ₹21,000 | ₹682.50 | ₹157.50 | ₹840 |
A common mistake is assuming ESI is irrelevant because your India team is senior. It often is not. Support, operations, admin and entry-level roles, especially in Tier 2 cities, can easily sit under ₹21,000 a month. Those staff also take maternity benefit from ESIC rather than from you.
Above the limit, nothing. No statutory medical scheme applies at all. Most employers then buy group medical cover, which our guide to health insurance for employees in India explains.
How does Remunance manage ESI for your team?
Remunance registers each eligible employee with ESIC, deducts the 0.75%, pays your 3.25% at cost and files the half-yearly returns. Nothing lands on your desk. Staff who cross the ceiling are tracked to the end of their contribution period, so cover never lapses early.
All of that sits inside one flat fee. For support or operations roles near the threshold, request an ESI-inclusive salary breakdown.
What else do people ask about ESI?
What is the ESI wage limit in 2026?
It is ₹21,000 a month, or ₹25,000 for persons with disability. A rise has been discussed but not notified.
When is the ESI payment due?
Within 15 days of the end of the month, so October wages carry ESI due by 15 November. Late payment attracts interest and damages.
What does ESIC mean?
ESIC is the Employees’ State Insurance Corporation, the body that runs the scheme and its hospitals and dispensaries. Insured employees get medical care, sickness pay, maternity and disablement benefits.