What is the ESI contribution rate?

0.75% from the employee and 3.25% from the employer, on gross wages.

What is the ESI wage limit?

₹21,000 per month for coverage (higher for persons with disability).

Does overtime count for ESI?

Overtime is generally part of wages for ESI, so it can affect the wage limit check.

Normally by the 15th of the following month.

ESI Calculation in India: Rates, Limit and Example

Employees' State Insurance gives covered workers medical and cash benefits, funded by small contributions from employer and employee. The calculation is simple, but who is covered and on what wages is where mistakes happen.

Who is covered

ESI generally applies to establishments with 10 or more employees (20 in some states), covering employees whose gross wages are within ₹21,000 per month (a higher ceiling applies for persons with disability). The coverage and thresholds are set by law and can change, so confirm them with the ESIC.

Contribution rates

Party	Rate	On
Employee	0.75%	Gross wages
Employer	3.25%	Gross wages
Total	4%	Gross wages

Employees earning a very low daily wage are exempt from their own share while the employer still pays. Check the current daily wage limit with the ESIC.

Worked example

Item	Calculation	Amount (₹)
Gross wages	Basic + HRA + allowances + overtime	20,000
Employee share	0.75% × 20,000	150
Employer share	3.25% × 20,000	650
Total payable	150 + 650	800

What counts as wages

ESI wages are broadly the remuneration payable including allowances and overtime, but excluding items such as employer contributions, gratuity and certain payments. Because overtime counts, a worker can cross the limit in a busy month, which is why coverage should be checked on actual wages and the contribution period rules.

Contribution periods and due date

ESI works in two contribution periods a year (April to September and October to March). Once covered in a period, an employee generally stays covered until the period ends even if wages cross the limit. Contributions are normally deposited by the 15th of the following month. Always verify current rules.

Common ESI mistakes

Ignoring overtime when checking the wage limit
Missing ESI numbers for new joiners
Not updating coverage after increments
Paying late
Using a flat ESI amount in a spreadsheet instead of wages-based calculation

How software helps

NexoraHRMS identifies covered employees from gross wages, calculates both shares, lists insured persons and downloads the challan statement as CSV. See ESI payroll software, PF calculation and manufacturing payroll.