What is ESI?


Employees state insurance (ESI) is a self-financing social and healthcare insurance scheme for Indian workers. Employees’ State Insurance Corporation (ESIC) is a body under the “Ministry of Labour and Employment” act. Under the scheme, the employers and workers are required to contribute to a social insurance fund, which is to be utilized for granting benefits to them.

Employees’ State Insurance (ESI) is governed by the Employees State Insurance Act, 1948. It is a self-financed social security scheme designed to protect employees covered under the ESI act. Employees of an eligible organization are protected against financial distress arising out of sickness, disablement, and death due to employment injury. 

Minimum number of employees required for registration of establishment
Sl. noStateMinimum employees to be registered
1Himachal Pradesh20
2Jammu & Kashmir20
3Jharkhand10
4Kerala10
5Madhya Pradesh20
6Maharashtra20
7Manipur20
8Meghalaya20
9Mizoram20
10Nagaland20
11Orissa10
12Pondicherry10
13Punjab10
14Rajasthan10
15Sikkim20
16Tamil Nadu20
17Tripura10
18Uttar Pradesh20
19Delhi10
20Karnataka10
21West Bengal10
22Andhra Pradesh10
23Arunachal Pradesh20
24Assam20
25Bihar10
26Chhattisgarh10
27Goa20
28Gujarat10
29Haryana10
30Uttarakhand10
31Chandigarh20
32Daman and Diu20
33Dadra and Nagar Haveli20
34Andaman and Nicobar20
35Lakshadweep20
36Outside India20


What are the ESI contribution rates?

The ESI contribution payable to the ESI corporation comprises employer’s and employee’s contribution at specified rates. These rates are subject to revision from time to time.  

Currently, the employer’s contribution is 3.25% of the wages, and that of employees is 0.75% of the wages payable or paid in every wage period. Usually, the wage period is a month. Such rates came into effect from the 1st of July 2019. 

Employees earning up to Rs 176 on a daily average basis are exempted from payment of their contribution. But, the employer has to contribute their share for such employees. 

How to setup ESI in SalaryBox?

  1. Open Settings option in SalaryBox


  2. Select Manage Salary Templates from Salary Settings Menu


  3. Select Create Template and name the Template (example: Salary Template for FY 2022)




  4. Under Employer Contribution you can find Employer ESI option from where you can select required option. (All available options as per the scheme are provided by default)

  5. Similarly under Employee Deductions you can find Employee ESI option from where you can select required option. (All available options as per the scheme are provided by default)
  6. After completing the entire template save the template.
  7. Select the employee on which you want to add the template.

  8. Go to Salary Payment Info


  9. Click on edit ESI, EPF an Allowance option 


  10. Choose the desired template and click on update CTC


  11. Once updated, ESI  will get calculated based on attendance of the month.