How ESIC is calculated
The employee pays 0.75% and the employer 3.25% of the wages earned in the month. Both are rounded up to the next rupee. An employee is covered when their full-month ESIC wages are ₹21,000 or less, or ₹25,000 for a person with disability.
An example
Wages of ₹17,550 for a full month:
- Employee: 0.75% = ₹131.63, rounded up to ₹132.
- Employer: 3.25% = ₹570.38, rounded up to ₹571.
If the same person is paid for 25 of 30 days, the shares are worked out on ₹14,625 earned: ₹110 and ₹476. Coverage does not change, because it is checked on the full month's wages.
ESIC wages under the Labour Codes
Since 21 November 2025, ESIC wages are basic, DA and retaining allowance, plus any part of the other pay beyond half of the total, the same wages as PF. Before that, ESIC was worked out on gross pay. So some employees with a gross above ₹21,000 are now covered. The 50% wages rule explained.
Who must register
ESIC applies to factories and establishments with 10 or more employees in areas where the scheme is in force, which now covers most of India. The employer registers once, then each covered employee gets an insurance number (IP number) and can use ESIC hospitals and dispensaries, with cash benefits for sickness, maternity and injury at work.
Contribution periods and due dates
There are two contribution periods a year, April to September and October to March. An employee covered at the start of a period stays covered until it ends, even if their pay goes up. Contributions are paid on the ESIC portal by the 15th of the following month. ESIC rules in detail.
Frequently asked questions
What is the ESIC wage limit?
₹21,000 of ESIC wages a month, or ₹25,000 for a person with disability.
What are the ESIC contribution rates?
0.75% of wages by the employee and 3.25% by the employer, both rounded up to the next rupee.
Who does not pay the employee share?
Employees whose average daily wage is ₹176 or less. The employer still pays its 3.25%.
Is ESIC on gross salary?
Not any more. Under the Labour Codes it is on basic and DA, plus any allowances above half of total pay.