ESI Registration

What is an Employee’s State Insurance (ESI)?

Employee’s State Insurance (ESI) is a self-financing social security and comprehensive health insurance program for Employees.

Under the Employees’ State Insurance (ESI) Act, 1948, businesses with 10 or more employees (20 in some states) must register with the Employees’ State Insurance Corporation (ESIC). ESIC provides monetary and medical benefits to Employees in case of sickness, maternity, and employment injury and makes provisions for related matters.

Who Needs ESI Registration?

• Any non-seasonal factory or establishment having more than 10 employees (in some states 20 employees),
• earning a salary of Rs. 21,000 or less per month (Rs.25,000 for disabled employees) are covered under the ESI scheme and thus, they have to mandatorily register with the ESIC within 15 days from the date of its applicability.

Contributions from employers and employees mainly finance the Scheme. For all employees earning INR 21000/- or less per month as wages, the employer contributes 3.25 percent of the wages payable to employees and the employee contributes 0.75 percent of the wages payable to an employee, a total share of 4.0 percent towards the fund.

This fund is managed by the Employees’ State Insurance Corporation (ESIC).

ESI Rate for 2024-2025

The rates are revised from time to time. Currently, the employee’s contribution rate (w.e.f. 01.07.2019) is 0.75% of the wages and that of employers is 3.25% of the wages paid/payable in respect of the employees in every wage period.