Rates
| Who pays | Rate | On |
|---|---|---|
| Employee | 0.75% | Gross wages earned in the month |
| Employer | 3.25% | Gross wages earned in the month |
Contributions are rounded up to the next rupee. Employees whose average daily wage is up to ₹176 do not pay the employee share; the employer still pays its share.
Worked example
| Monthly gross | Employee 0.75% | Employer 3.25% |
|---|---|---|
| ₹18,000 | ₹135 | ₹585 |
| ₹17,550 | ₹132 (₹131.625 rounded up) | ₹571 (₹570.375 rounded up) |
A pay rise during a period: an employee covered from April on ₹20,000 gross gets a rise to ₹23,000 in July. They stay covered until the end of September. For July to September, the employee pays ₹173 (₹172.50 rounded up) and the employer pays ₹748 (₹747.50 rounded up).
Contribution periods
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, and contributions continue, until the end of that period, even if their wages go above ₹21,000 during it.
Monthly steps
- Work out each covered employee's gross for the month.
- Deduct 0.75% from pay; add the employer's 3.25%.
- Upload the monthly contribution file on the ESIC portal and pay by the 15th of the following month.
Common mistakes
- Stopping ESIC in the middle of a contribution period because pay went above ₹21,000.
- Using ₹21,000 for a person with disability, whose limit is ₹25,000.
- Deducting the employee share when the average daily wage is up to ₹176. Only the employer share is due then.
- Rounding to the nearest rupee or down. Contributions are rounded up to the next rupee.
- Paying after the 15th of the following month.
How HR Bingo handles it
HR Bingo checks coverage on each employee's full-month gross, works out both shares on the month's earned gross with ESIC's rounding, and produces the monthly upload file. ESIC can be turned off for individual employees where it does not apply.
Sources
Frequently asked questions
What is the ESIC wage limit?
₹21,000 gross a month, or ₹25,000 for persons with disability.
What are the ESIC rates?
0.75% of gross by the employee and 3.25% by the employer.
When is ESIC due?
By the 15th of the following month.
Does ESIC stop when pay goes above ₹21,000?
Not in the middle of a contribution period. An employee covered at the start of April to September, or October to March, stays covered until the end of that period.