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ESI calculator: coverage and ESIC contribution
Check whether an employee falls under ESIC and work out the 0.75% employee and 3.25% employer contribution for the month, with overtime treated the way ESIC treats it.
How ESI is calculated
ESI works in two steps. First decide whether the employee is covered, using gross wages without overtime. Then work out the contribution on everything paid in the month, including overtime. Mixing these up is the most common ESI mistake in hand-made payroll sheets.
Contribution rates of 0.75% and 3.25% have applied since 1 July 2019. Each share is rounded up to the next whole rupee, so ₹142.10 becomes ₹143, not ₹142.
Worked example
An employee earns gross wages of ₹18,000 and ₹1,000 of overtime in the month.
- Coverage check: ₹18,000 is within ₹21,000, so the employee is covered. Overtime is ignored here.
- Contribution wages: ₹18,000 + ₹1,000 = ₹19,000.
- Employee share: ₹19,000 × 0.75% = ₹142.50, rounded up to ₹143.
- Employer share: ₹19,000 × 3.25% = ₹617.50, rounded up to ₹618.
- Total deposit: ₹143 + ₹618 = ₹761.
If the same employee earned ₹22,000 before overtime, they would not be newly covered and nothing would be due, unless they were already covered earlier in the contribution period.
Who ESIC covers
ESI applies to notified factories and establishments with 10 or more employees. A few states still use 20. Within a covered establishment, every employee earning up to ₹21,000 a month is covered. The limit is ₹25,000 for persons with disability.
Employees on very low wages, with an average daily wage of ₹176 or less, do not pay the employee share. The employer's 3.25% is still due, and the employee keeps full benefits.
When coverage continues above the limit
Coverage is not re-tested every month. ESIC uses two six-month contribution periods, 1 April to 30 September and 1 October to 31 March. They are linked to benefit periods running from 1 January to 30 June and 1 July to 31 December.
If a covered employee's wages cross ₹21,000 in, say, July after an increment, ESI continues to be deducted on the actual wages until 30 September. From 1 October they fall out of coverage. This calculator only tests the month you enter, so apply this rule yourself. The guide to ESI contribution and benefit periods walks through it month by month.
Other things to keep in mind
- Contributions are due by the 15th of the following month and are paid on the ESIC portal.
- Wages for ESI include most allowances paid in cash. Check doubtful items, such as incentives or arrears, against ESIC's definition of wages.
- If an employee works only part of the month, calculate ESI on the wages actually paid.
For more examples, read ESI calculation and eligibility. For teams, ESI management in Swastik Payroll checks the ₹21,000 limit for each employee in the salary run and exports a contribution sheet with IP numbers, days and wages. You can also compare it with the PF calculator for the other half of monthly statutory payroll.
ESI calculator FAQs
Is ESI calculated on basic salary or gross salary?
On gross wages. Unlike PF, ESI is not limited to basic + DA; allowances such as HRA and conveyance paid in cash are included.
Does overtime push an employee out of ESI?
No. Overtime is left out when checking the ₹21,000 limit. It is still added to the wages on which the 0.75% and 3.25% are calculated.
An employee's salary went from ₹20,500 to ₹23,000 in August. Do I stop ESI?
Not yet. August falls in the April to September contribution period, so ESI continues on the full ₹23,000 until 30 September. Coverage ends from 1 October.
Why round up instead of to the nearest rupee?
ESIC rules require each share to be rounded to the next higher rupee. Rounding to the nearest rupee can leave the deposit a rupee short.
Results are estimates for planning. Statutory rates, ceilings and tax rules change; check the current notifications or consult your CA before using a figure for payroll or tax filing.
Stop calculating payroll by hand
Swastik Payroll applies these rules to every employee automatically, straight from attendance, and produces payslips and PF/ESIC files.