ESIC Slabs, Thresholds & Monthly Return Filing Automation
2026-08-18 in Labor Law & Social Security
Under the Employees' State Insurance Act, 1948, ESIC is mandatory for all non-seasonal factory and corporate establishments employing 10 or more persons where employees earn a gross monthly wage of up to ₹21,000 (₹25,000 for persons with disabilities). The statutory contribution rates are 0.75% for the employee and 3.25% for the employer on actual gross monthly earnings.
Who is Covered Under the ESI Scheme in India?
The Employees' State Insurance (ESI) scheme is an integrated social security framework providing comprehensive medical care and cash benefits to Indian workers during sickness, maternity, temporary or permanent disablement, and workplace injuries.
Establishments covered under ESI must register all eligible employees earning a monthly gross wage of ₹21,000 or less. If an employee's gross wage exceeds ₹21,000 during a contribution period, they continue to remain covered until the end of that contribution period (April to September or October to March).
ESIC Contribution Rates & Monthly Calculation Example
The statutory contribution rates effective across India are:
- Employee Contribution: 0.75% of gross wages.
- Employer Contribution: 3.25% of gross wages.
- Total Statutory Contribution: 4.00% of gross wages.
Employees earning an average daily wage of up to ₹176 are exempted from paying employee contributions; however, the employer must still remit the 3.25% employer share.
ESIC Contribution Calculation Matrix
| Monthly Gross Salary | Employee Share (0.75%) | Employer Share (3.25%) | Total ESIC Remittance (4.00%) | Eligibility Status |
|---|---|---|---|---|
| ₹15,000.00 | ₹112.50 | ₹487.50 | ₹600.00 | Covered |
| ₹18,500.00 | ₹138.75 | ₹601.25 | ₹740.00 | Covered |
| ₹21,000.00 | ₹157.50 | ₹682.50 | ₹840.00 | Covered (Threshold Limit) |
| ₹25,000.00 | ₹0.00 | ₹0.00 | ₹0.00 | Exempt (> ₹21,000) |
Automating ESIC Monthly Filing with HRMS108
Calculating pro-rated gross wages after Attendance Loss of Pay (LOP) and overtime manually is prone to errors. HRMS108 calculates monthly ESIC dynamically, verifies eligibility thresholds, and generates monthly return summaries and challan data files automatically.
Frequently Asked Questions
What is the wage limit for ESIC deduction in India?
The monthly gross wage ceiling for ESIC applicability is ₹21,000 per month (and ₹25,000 per month for employees with certified disabilities).
What happens if an employee's salary increases beyond ₹21,000 mid-year?
If an employee's wage exceeds ₹21,000 after the start of a contribution period, ESIC deductions continue on the higher wage until the end of that specific contribution period.
What is the due date for depositing ESIC monthly contributions?
ESIC monthly contributions must be deposited on or before the 15th of the following calendar month via the online ESIC portal.
Automate Indian Statutory Payroll & Workforce Operations
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