Calculate monthly ESI contributions for employee and employer. Based on gross wages, the ₹21,000 wage ceiling, and current ESIC rates.
Enter the employee's gross monthly wages and click Calculate.
How ESI is Calculated
ESI is calculated on gross wages, not on basic salary alone. This distinguishes it from PF, which is calculated on basic plus DA. Gross wages include basic pay, dearness allowance, HRA, overtime pay, city compensatory allowance, and fixed recurring allowances. Annual bonuses and irregular payments are generally excluded.
The wage ceiling is ₹21,000 per month. Employees earning above this are not covered and no ESI is deducted or paid. For persons with disabilities the ceiling is ₹25,000 per month.
Employees whose daily average wage is ₹176 or less are exempt from paying their own 0.75% contribution. The employer must still pay their 3.25% share for these employees.
Key Rules
The ESI Act applies to factories and establishments with 10 or more employees. In some states the threshold is 20 employees. Once covered, an establishment remains covered even if headcount later falls below the threshold.
There are two contribution periods each year: April 1 to September 30, and October 1 to March 31. Benefit periods follow with a two-month lag. An employee who contributes in one period becomes eligible for benefits in the corresponding benefit period.
Both employee and employer contributions must be deposited with ESIC by the 15th of the following calendar month. Late payment attracts 12% annual interest. Additional damages ranging from 5% to 25% of the outstanding amount apply depending on the duration of delay.
PF is calculated on basic salary plus DA only. ESI is calculated on gross wages including HRA and other recurring allowances. An employee's PF and ESI deductions will therefore use different salary figures even from the same payslip.
A new employee must be registered with ESIC from the date of joining if the establishment is covered. The employer must obtain a temporary identity card until the permanent e-Pehchan card is issued. Medical benefits begin from the first day of insurable employment.
Quick Reference
PF and ESI both show up on every payslip but use different salary bases, different ceilings, and serve entirely different purposes.
| Parameter | ESI | PF |
|---|---|---|
| Calculated on | Gross wages (basic, DA, HRA, all fixed allowances) | Basic salary + DA only |
| Wage ceiling | ₹21,000/month (₹25,000 for persons with disabilities) | ₹15,000/month statutory floor; many companies contribute on actual basic |
| Employee rate | 0.75% of gross wages | 12% of basic + DA |
| Employer rate | 3.25% of gross wages | 12% of basic + DA (split between EPF and EPS) |
| Purpose | Healthcare, maternity, sickness, disability insurance | Retirement savings and pension |
| Withdrawal | Not withdrawable; benefits are claimed in kind or as cash allowances | Withdrawable on retirement, exit, or specific purposes |
| Administered by | Employees' State Insurance Corporation (ESIC) | Employees' Provident Fund Organisation (EPFO) |
FAQ
Offer letters, payslips, onboarding, and separation documents. Starting at ₹99 per document.
Related Reading
Calculate monthly EPF contributions, EPS split, and retirement corpus.
Calculate gratuity payable under the new Labour Codes, including fixed-term employees.
A detailed guide to ESI rates, applicability, contribution periods, and benefits.
See how CTC breaks down into take-home after PF, ESI, tax, and other deductions.