Employee State Insurance { ESI }

ESI stands for Employee State Insurance which is managed by Employee State Insurance Corporation. It is a contribution made by employees as well as employers to support Indian employees to take part in self-financed, healthcare, insurance funds. ESI is a social security scheme that provides social-economic protection to employees in the event of sickness, maternity, accident, or any other kind of emergency.

The ESI Scheme is governed under the ESI act 1948 and provides full medical care till the employee is back to a normal healthy condition. As per the scheme, any organization with more than 10 employees (in some states 20 employees) who have a maximum compensation of INR 15,000/- has to register with the ESIC. It provides financial support to compensate for the loss that occurred due to sickness or any other medical reason.

How is ESI calculated?

As per the ESI Act, employee contribution is 0.75% of salary/wages payable and employer contribution is 3.25% of salary/wages paid or payable.


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