ESI (Employees’ State Insurance) registration is mandatory for establishments employing 10 or more persons in most regions — a threshold that has expanded under the new Labour Codes to cover more categories and geographies. It applies to employees earning up to ₹21,000 per month (₹25,000 for persons with disability). Employees contribute 0.75% of gross wages and employers contribute 3.25%, funding medical, disability, and maternity benefits through ESIC. Registration is done online via the ESIC portal, with contributions deposited by the 15th of the following month.
In This Guide:
- 1. Who Must Register for ESI
- 2. What Employees Actually Get From ESI
- 3. Step-by-Step ESIC Registration Process
- 4. Contribution Rates and Wage Threshold
- 5. Monthly Compliance Cycle
- 6. Frequently Asked Questions
1. Who Must Register for ESI
ESI coverage applies to establishments employing 10 or more persons in most states, though this threshold was 20 in some regions historically. Under the new Labour Codes, ESI coverage has expanded — both in terms of geography (previously exempt areas may now be covered) and category (gig and platform workers now fall within the social security framework in certain conditions). If your establishment previously assumed it was exempt based on old thresholds, it’s worth reconfirming current applicability.
2. What Employees Actually Get From ESI
ESI isn’t just a payroll deduction — it funds real benefits employees can use: medical treatment at ESIC hospitals and dispensaries for the employee and dependents, cash benefits during sickness or temporary disability, maternity benefit (paid leave during maternity), permanent disability benefit, and a dependent benefit paid to family in case of an employee’s death due to employment injury. Framing ESI to your team as an actual benefit, not just a deduction line on their payslip, tends to reduce the confusion and pushback we sometimes see from employees unfamiliar with what it covers.
3. Step-by-Step ESIC Registration Process
Step 1: Register the Establishment on the ESIC Portal
Submit company PAN, incorporation certificate, and employee details to obtain a 17-digit registration number.
Step 2: Generate Insured Person (IP) Numbers
Each eligible employee is registered and issued an IP number linked to their ESI benefits.
Step 3: Issue the E-Pehchan Card
Employees receive a temporary identification card, later replaced by a permanent ESIC pehchan card, used to access benefits at ESIC facilities.
Step 4: Begin Monthly Contribution Filing
Once registered, monthly contributions are calculated and deposited, establishing the ongoing compliance cycle.
4. Contribution Rates and Wage Threshold
| Detail | Value |
|---|---|
| Wage threshold for eligibility | Up to ₹21,000/month (₹25,000 for persons with disability) |
| Employee contribution | 0.75% of gross wages |
| Employer contribution | 3.25% of gross wages |
| Total contribution | 4% of gross wages |
| Deposit due date | 15th of the following month |
5. Monthly Compliance Cycle
ESI compliance runs on a monthly cycle similar to PF — calculate contributions based on gross wages for eligible employees, deposit by the 15th, and file the periodic return reconciling contributions with ESIC records. A detail worth flagging: an employee whose salary crosses ₹21,000 mid-year doesn’t immediately drop out of ESI coverage — they remain covered until the end of that contribution period (typically a 6-month cycle), which is a common point of confusion for payroll teams.
Setting Up ESI Compliance for Your Team?
DKP Global handles complete ESI registration and monthly compliance filing, so contributions are calculated correctly and your team’s benefits are never at risk from a filing gap.
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6. Frequently Asked Questions
A: Employees earning up to ₹21,000 per month (₹25,000 for persons with disability), working at establishments meeting the applicable employee-count threshold — 10 or more in most regions, expanded under the new Labour Codes.
A: Employees contribute 0.75% of gross wages; employers contribute 3.25%, for a combined 4% funding medical, disability, and maternity benefits.
A: Register your establishment on the ESIC portal with PAN and incorporation documents to receive a registration number, then generate Insured Person numbers for eligible employees.
A: Only for employees earning up to the wage threshold (₹21,000/month) at establishments meeting the employee-count threshold. Employees earning above this aren’t covered by ESI.
A: Medical treatment at ESIC facilities, sickness and disability cash benefits, maternity benefit, and a dependent benefit paid to family in case of an employment-related death.
A: They remain covered for the remainder of the current contribution period (typically 6 months) even after crossing the threshold, and drop out of mandatory coverage only from the next contribution period.
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