What is ESI and who is covered

The Employee State Insurance (ESI) scheme, run by the ESIC, is a self-financing social security scheme that provides medical care, sickness, maternity and disability benefits to workers and their dependents. It applies to factories and establishments covered by the ESI Act, typically those employing 10 or more persons.

An employee is covered under ESI when their gross monthly wage is ₹21,000 or less (₹25,000 for employees with disabilities). Once an employee is covered at the start of a contribution period, deductions continue until the end of that period even if wages later rise above the ceiling. This ESI calculator checks coverage against the ₹21,000 limit and computes the employee and employer ESIC contributions instantly.

ESI contribution rates

ESI is calculated on gross wages — which generally include basic, dearness allowance, HRA and most other allowances. The employee contributes 0.75% of gross wages and the employer contributes 3.25%, for a combined ESIC contribution of 4% of gross wages. There is no employee contribution from a worker whose average daily wage is below the prescribed exemption limit.

For CA firms and payroll

ESI contributions must be deposited by the 15th of the following month. CA firms and payroll teams can use this employee state insurance calculator to verify deductions, reconcile ESIC challans and confirm coverage when an employee’s wage changes. Hidesc helps practices track ESI, PF and TDS deadlines and manage payroll compliance across every client.

ESI contribution — example on ₹18,000 gross wages