ESI Calculator
Calculate employee and employer ESI contributions at 0.75% and 3.25% of gross wages. The ₹21,000 ceiling decides whether you are covered — it does not cap the contribution, which is due on total wages with no upper limit.
Free · No sign-up · Nothing leaves your browser · Figures reviewed 22 September 2026
Your details
Gross, not basic. ESI runs on a wider base than provident fund does.
Raises the coverage ceiling from ₹21,000 to ₹25,000.
Used for the daily-average test that waives the employee's share at ₹176 a day or below.
Total ESI contribution each month
₹720
₹135 from you, ₹585 from your employer.
- Employee · 19%
- Employer · 81%
The split
- Your share0.8% of ₹18,000
- ₹135
- Employer's share3.3% of ₹18,000
- ₹585
- Total remitted
- ₹720
- A year
- ₹8,640
Coverage
- Monthly gross wages
- ₹18,000
- Coverage ceilingGeneral ceiling
- ₹21,000
- Daily average wageGross ÷ 30 days — the basis for the ₹176 exemption
- ₹600.00
The ceiling is a gate, not a cap. Once you are inside ESI, contribution is due on total wages with no upper limit — ESIC's own guidance is explicit about this, and capping at ₹21,000 is the classic payroll bug.
Payment is due within 15 days of the end of the month. Interest on delay runs at 12% a year, with damages of 1% a month.
This is an estimate for planning, not tax or legal advice. Statutory rates and thresholds are date-effective and change by notification — confirm against the current one before you run payroll or file.
Employees' State Insurance is contributed at 0.75% by the employee and 3.25% by the employer, on gross wages. Coverage runs up to ₹21,000 a month, or ₹25,000 for a person with disability.
The most expensive misunderstanding in Indian payroll lives here. The ceiling is a gate, not a cap: it decides whether someone is inside ESI at all, and once they are, contribution is payable on their full wages with no ceiling. Capping the contribution at ₹21,000 under-remits, and it is the mirror image of provident fund, where the ceiling genuinely is a cap.
The gate, and why it is not a cap
ESIC's own guidance is explicit: though there is a wage ceiling for coverage of an employee, there is no ceiling in the definition of wages for payment of contribution, so contribution is payable on total wages without any ceiling.
In practice that means an employee earning ₹20,000 contributes on ₹20,000. If they then receive arrears or overtime that push a month's wages to ₹24,000, the contribution for that month is on ₹24,000 — coverage does not stop mid-period, and the contribution does not stop at ₹21,000.
Contribution periods, and the freeze
There are two contribution periods a year: 1 April to 30 September, and 1 October to 31 March. Coverage is tested at the start of a period and then frozen for the whole of it.
So an employee whose wages rise above ₹21,000 in July stays covered until 30 September, contributing on the higher wages throughout. Re-testing coverage every month is wrong and produces a contribution history that will not reconcile.
Each contribution period has a matching benefit period six months later — that is when the cover earned can be claimed, which is why continuity of contribution matters to the employee even when the amounts are small.
The ₹176 exemption
An employee whose average daily wage is ₹176 or below is exempt from the employee's contribution. The employer still pays its 3.25%.
The test is on the daily average wage, not on monthly gross, and it is applied per employee per month. It is commonly missed, and missing it means deducting from the lowest-paid people on the payroll who are specifically exempt.
Frequently asked questions
- What is the ESI contribution rate?
- 0.75% of gross wages from the employee and 3.25% from the employer, so 4% in total. These rates took effect on 1 July 2019, down from 6.5%, and carried over into the Social Security (Central) Rules.
- Is ESI capped at ₹21,000?
- No. ₹21,000 is the coverage ceiling — it decides whether an employee is in ESI. It does not cap the contribution. Once covered, contribution is due on total wages with no upper limit, and capping it at ₹21,000 is the single most frequent implementation error in Indian payroll.
- What happens if an employee's salary crosses ₹21,000 mid-year?
- They stay covered until the end of the current contribution period — 30 September or 31 March — and contribute on the higher wages for the rest of it. Coverage is tested at the start of a period and frozen, not re-tested monthly.
- Who is exempt from paying the employee share of ESI?
- An employee whose average daily wage is ₹176 or less. Their employer still pays its 3.25% share. The test is on daily average wage, not monthly gross.
- When is ESI due?
- Within 15 days of the last day of the calendar month. Delay attracts interest at 12% a year and damages simplified to 1% a month.
About this tool
Built by the ViniOffice team. Figures and rules last reviewed 22 September 2026 against the statutory reference this team maintains. Indian statutory rates are date-effective and change by notification — confirm against the current one before running payroll or filing. This is an estimate for planning, not tax or legal advice. Statutory rates and thresholds are date-effective and change by notification — confirm against the current one before you run payroll or file.
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