What happens if my salary crosses ₹21,000 during a contribution period?

Once an employee is covered at the start of a contribution period, they typically remain covered for that entire period even if a wage increase takes them above the ₹21,000 threshold partway through. Eligibility is reassessed at the start of the next contribution period rather than the moment the wage change happens.

Can employees above the wage threshold opt into ESI voluntarily?

Generally, no. ESI coverage is wage-threshold-based and applies as a matter of statute, not as a private policy an employee can purchase or opt into. Employees earning above ₹21,000/month (₹25,000/month for persons with disabilities) at a covered establishment are not enrolled, and there isn't a general voluntary-enrolment route above the ceiling the way there can be with some other schemes.

How do I find my nearest ESIC hospital or dispensary?

The ESIC portal (esic.gov.in) publishes a directory of ESI hospitals and dispensaries searchable by state and district. Insured employees can also check their allotted dispensary details linked to their Insurance Number through the portal or the UMANG app.

What is the difference between the contribution period and the benefit period?

The contribution period is the six-month window (1 April–30 September or 1 October–31 March) during which contributions are paid on an employee's wages. The corresponding benefit period follows roughly three months after that contribution period ends, and it's during the benefit period that cash benefits become payable based on the contributions recorded in the preceding contribution period.

Does ESI cover an employee's family members?

Yes. Dependants, as defined under the ESI Act, are covered for benefits such as free medical treatment and dependants' benefit (payable if the insured employee dies due to an employment injury). Exact dependant eligibility rules are set out in the Act and its regulations - check the ESIC portal for the current definitions that apply to your situation.

Verified by INDPayroll Compliance TeamLast updated: August 10, 2026

Compliance guide

ESI Compliance Guide - Registration, Contributions & Benefits

Everything an Indian employer needs to know about ESI: who must register, how contributions are calculated, what benefits employees get, and how contribution and benefit periods work.

Administered by ESIC0.75% + 3.25% contribution₹21,000/month wage threshold

Overview

The Employees' State Insurance (ESI) scheme is a self-financed social security and health insurance scheme for Indian workers, administered by the ESI Corporation (ESIC). It is mandatory for establishments with 10 or more employees - though the exact employee-count threshold is state-notified and can vary slightly - and it covers employees earning gross wages up to ₹21,000/month (₹25,000/month for persons with disabilities).

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Registration

Registration is done through the ESIC portal (esic.gov.in). On registering, the establishment is issued a 17-digit registration code, and each covered employee is issued their own Insurance Number, which they use to access ESIC benefits for the rest of their working life. Registration must be completed within 15 days of the ESI Act becoming applicable to the establishment.

Contribution Structure

ESI contributions are calculated as a percentage of gross wages, split between employee and employer. The employee contributes 0.75% of gross wages, and the employer contributes 3.25% of gross wages - a combined 4%. Once an employee is covered at the start of a contribution period, they typically remain covered for that full period even if a wage increase takes them above the threshold mid-period.

Contribution	Rate	Paid by
Employee share	0.75% of gross wages	Employee
Employer share	3.25% of gross wages	Employer
Combined	4.00% of gross wages	Both

Benefits Covered

ESI-covered employees and their dependants are entitled to:

Free medical treatment at ESIC hospitals and dispensaries
Sickness benefit - cash compensation during certified illness, generally a percentage of average daily wages for a capped number of days per year
Maternity benefit - paid leave for childbirth, miscarriage or adoption, per the scheme's own eligibility rules
Disablement benefit - temporary or permanent, following an employment injury
Dependants' benefit - payable to family members if death occurs due to an employment injury

Wage thresholds, benefit amounts and eligibility rules are set by the ESI Corporation and can change by notification - this guide reflects the general framework; verify current specifics on the ESIC portal.

Contribution & Benefit Periods

ESI operates on two six-month contribution periods each year: 1 April to 30 September, and 1 October to 31 March. Contributions paid during a contribution period determine eligibility for cash benefits during the corresponding benefit period, which follows roughly three months after each contribution period ends.

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Frequently Asked Questions

No. ESI is a statutory social security scheme administered by the ESI Corporation, funded jointly by employer and employee contributions on gross wages. Unlike a private health insurance policy, coverage isn't purchased or chosen - it applies automatically once an employee's wages fall within the notified threshold at a covered establishment, and it bundles cash benefits (sickness, maternity, disablement, dependants') alongside medical care.

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