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For businessesRates reviewed September 2026

ESI Contribution Calculator under the Code on Social Security

An ESI contribution calculator works out what an employee and the employer pay each month into the Employees' State Insurance scheme, which now runs under Chapter IV of the Code on Social Security, 2020. The Code repealed the Employees' State Insurance Act, 1948 when it came into force on 21 November 2025, and the rules and regulations made under the old Act are saved for a year to the extent they are not inconsistent with it.

The numbers carried over. The employee contributes 0.75% of wages and the employer 3.25%, the rates in force since 1 July 2019, and coverage stops at wages of ₹21,000 a month, or ₹25,000 for a person with disability, the ceiling in force since 1 January 2017. The scheme applies to establishments with ten or more persons in the districts where it has been implemented, and the Ministry of Labour and Employment has confirmed that the ₹21,000 ceiling continues to apply under the Code.

The base is what moved. The Code's definition of wages, being basic pay, dearness allowance and retaining allowance with excluded allowances above half of total remuneration added back, applies to ESI from 21 November 2025. An employee with gross pay of ₹32,000 and basic of ₹14,000 has statutory wages of ₹16,000 and is inside the ceiling, although gross pay of ₹32,000 would have put the same employee outside the old Act.

Coverage is tested by contribution period rather than by month. The two periods run from 1 April to 30 September and from 1 October to 31 March, and an employee whose wages cross the ceiling after a period has begun stays covered, and keeps contributing on the higher wages, until that period ends. Contributions in each period earn benefits in a corresponding benefit period that starts three months after it closes.

ESI Contribution Calculator

Everything paid for the month: basic, DA, HRA, conveyance, special allowance and the rest.

₹

Basic pay, dearness allowance and retaining allowance. If it is under half of gross, the shortfall is added back as wages.

₹
Employee is a person with disability

The wage ceiling is ₹25,000 rather than ₹21,000.

Count everyone, including those paid above the ceiling. Ten or more brings the establishment in.

employees

April to September is one contribution period and October to March the other.

Wages were within the ceiling when the contribution period began

An employee whose wages cross the ceiling after the period begins stays covered until it ends.

Total ESI contribution, monthly

₹640

₹120 from the employee and ₹520 from the employer on ₹16,000 of wages

Statutory wages (monthly)₹14,000 of basic and DA plus ₹2,000 added back so that wages are at least half of ₹32,000
₹16,000
Wage ceiling applicableGeneral ceiling, in force since 1 January 2017
₹21,000
Establishment coverage25 employees, threshold of 10
Covered
Employee coverage₹16,000 is within the ₹21,000 ceiling
Covered
Employee contribution at 0.75%0.75% of ₹16,000, rounded up to the next rupee
₹120
Employer contribution at 3.25%3.25% of ₹16,000, rounded up to the next rupee
₹520
Total monthly contributionDeposited by the employer, who recovers only the employee share from wages
₹640
Annual contribution₹640 x 12 months at the same wages
₹7,680
Contribution periodApril 2026 falls in the first period of FY 2026-27
1 April 2026 to 30 September 2026
Corresponding benefit period
1 January 2027 to 30 June 2027
  • Basic and DA are less than half of gross, so ₹2,000 is added back under section 2(88) of the Code on Social Security. Before 21 November 2025 the test ran on gross pay of ₹32,000.
  • Rates of 0.75% and 3.25% have applied since 1 July 2019 and the ₹21,000 ceiling since 1 January 2017. Both carried into the Code on Social Security, 2020 from 21 November 2025, and the Ministry of Labour and Employment has confirmed the ceiling continues.

The formula

Employee contribution = Wages x 0.75%; Employer contribution = Wages x 3.25%; Total = Wages x 4%, each rounded up to the next rupee, payable while wages are within the ceiling

Wages
Basic pay, dearness allowance and retaining allowance under section 2(88) of the Code on Social Security, with any excluded allowances above 50% of total remuneration added back.
Wage ceiling
₹21,000 a month for coverage, and ₹25,000 a month for a person with disability. Employees above the ceiling are still counted when testing whether the establishment has ten or more persons.
Contribution period
Six months, 1 April to 30 September or 1 October to 31 March. Coverage is fixed at the start of the period and runs to its end even if wages cross the ceiling in between.
Benefit period
The six months in which contributions earn benefits: 1 January to 30 June for the April to September period, and 1 July to 31 December for the October to March period.
Rounding
Each share is rounded up to the next higher rupee under rule 51 of the ESI (Central) Rules, 1950, which the Code saves.

The rates and the ceiling are the ones carried into the Code on Social Security. A revision of the ceiling has been under discussion for some time and none had been notified when this page was reviewed.

How to calculate it

  1. 1

    Check the establishment

    Chapter IV applies to an establishment with ten or more persons, other than a seasonal factory, in the areas where the scheme is implemented. Count every employee, including those whose wages are above the ceiling, because the Code says they are taken into account for coverage.

  2. 2

    Fix the statutory wages

    Take basic pay, dearness allowance and retaining allowance. If the other components of the package exceed half of total remuneration, add the excess back. Since 21 November 2025 this figure, not gross pay, is tested against the ceiling and carries the contribution.

  3. 3

    Test the ceiling

    Wages up to ₹21,000 a month are covered, and up to ₹25,000 for a person with disability. Wages above the ceiling at the start of a contribution period mean no coverage and no contribution for that period.

  4. 4

    Compute the contributions

    The employee's share is 0.75% of wages and the employer's share is 3.25%, each rounded up to the next rupee. The employer deposits both shares and can recover only the employee's share from wages, never its own.

  5. 5

    Place the wage month in its contribution period

    April to September is one period and October to March the other. An employee whose wages cross the ceiling after the period begins stays covered until it ends, contributing on the actual higher wages, and drops out from the next period.

ESI contribution parameters, FY 2026-27

ESI contribution parameters, FY 2026-27
ItemPosition
Applies toEstablishments with ten or more persons, in the districts where the scheme is implemented
Wage ceiling₹21,000 a month, in force since 1 January 2017
Wage ceiling, person with disability₹25,000 a month
Employee contribution0.75% of wages, since 1 July 2019
Employer contribution3.25% of wages, since 1 July 2019
Total contribution4% of wages
Contribution periods1 April to 30 September, and 1 October to 31 March
Benefit periods1 January to 30 June, and 1 July to 31 December
Wages crossing the ceiling mid-periodCovered, and contributing on the higher wages, until the period ends

Worked example

Gross monthly remuneration
₹32,000
Basic plus DA
₹14,000
Person with disability
No
Employees in the establishment
25
Wage month
April 2026
Within the ceiling when the period began
Yes
  • Half of total remuneration = ₹16,000, which exceeds basic and DA of ₹14,000, so ₹2,000 of allowances is added back and statutory wages are ₹16,000
  • ₹16,000 is within the ₹21,000 ceiling and the establishment has 25 employees, so the employee is covered
  • Employee contribution = 0.75% of ₹16,000 = ₹120 a month
  • Employer contribution = 3.25% of ₹16,000 = ₹520 a month
  • Total = ₹640 a month, or ₹7,680 across twelve months at the same wages

Employee contribution = ₹120 and employer contribution = ₹520, a total of ₹640 a month or ₹7,680 a year, for the contribution period 1 April 2026 to 30 September 2026.

Frequently asked questions

The employee pays 0.75% of wages and the employer pays 3.25%, a total of 4%. The Government reduced the rates from 1.75% and 4.75% with effect from 1 July 2019 and they have not changed since, including on the transition to the Code on Social Security, 2020 on 21 November 2025. Each share is rounded up to the next rupee, and the employer deposits both shares but may recover only the employee's share from wages.
₹21,000 a month, and ₹25,000 a month for a person with disability. The ₹21,000 ceiling has applied since 1 January 2017, when it was raised from ₹15,000, and the Ministry of Labour and Employment has confirmed that it continues to apply under the Code on Social Security. A higher ceiling has been under discussion for some time, but no revision had been notified when this page was reviewed.
You stay covered until that contribution period ends. The two periods run from 1 April to 30 September and from 1 October to 31 March, and an employee whose wages cross the ceiling after a period has begun continues as an insured person, with contributions on the actual higher wages, until the period closes. Coverage and deductions stop from the start of the next period, and neither you nor the employer can opt out midway.
The Employees' State Insurance Act, 1948 was repealed and ESI moved into Chapter IV of the Code on Social Security, 2020 from 21 November 2025, with the existing rules and regulations saved for a year to the extent they are consistent with the Code. The rates, the ceilings and the contribution periods carried over. What changed is the definition of wages: basic, DA and retaining allowance, with excluded allowances above 50% of total remuneration added back, now decides coverage and carries the contribution.
Every establishment with ten or more persons, other than a seasonal factory, in an area where the scheme has been implemented, and any establishment carrying on a notified hazardous or life threatening occupation even with a single employee. The Code specifies that employees whose wages exceed the ceiling are still counted for this purpose, so an office with twelve staff of whom only three are within ₹21,000 is covered and must register and contribute for those three.
Not since 21 November 2025. The Ministry of Labour and Employment has stated that the definition of wages in section 2(88) of the Code on Social Security applies to ESI from that date, so contributions run on basic pay, dearness allowance and retaining allowance, plus any excluded allowances that exceed half of total remuneration. A ₹32,000 package with ₹14,000 of basic and DA gives statutory wages of ₹16,000, and the contribution is 4% of ₹16,000 rather than of ₹32,000.
The contribution period is the six months in which contributions are paid: 1 April to 30 September or 1 October to 31 March. The corresponding benefit period is the six months in which those contributions earn sickness, maternity and other cash benefits, starting three months after the contribution period closes, so 1 January to 30 June for the April to September period and 1 July to 31 December for the October to March period.

Sources

Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it.

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