ESI (health insurance)
Employee State Insurance is government-run health cover for lower-paid staff — medical care, sick pay, and maternity and disability benefits, funded by small contributions from both sides.
Employee State Insurance (ESI) is run by the Employees' State Insurance Corporation (ESIC). It covers employees who earn up to a set salary. A small percentage comes out of the employee's pay, the employer adds more, and you file the total with ESIC. Webelio decides who's covered and works out both shares.
Does this apply to my business?
- Salary: an employee is covered when their gross pay is ₹21,000 a month or less.
- Headcount: the scheme applies to establishments with 10 or more employees (20 in a few states).
- Location: ESI applies in areas the government has notified — most industrial and urban areas.
If you have covered staff, register with ESIC and enter your code under compliance setup. Employees earning above ₹21,000 are simply not covered — no action needed for them.
What Webelio does automatically
For every employee whose gross is ₹21,000 or less, each payroll run:
- Flags them as ESI-covered.
- Deducts 0.75% of gross from the employee.
- Adds 3.25% of gross as the employer's share.
- Keeps a covered employee in the scheme until the end of the current contribution period, even if a mid-year raise pushes them over ₹21,000 (this is the rule — Webelio follows it).
- Builds the ESI return you upload to ESIC.
What you still must do
- Register with ESIC and enter your establishment code; store each covered employee's ESIC (insurance) number.
- Download the ESI return from Webelio each month.
- Upload it to the ESIC portal and generate the challan.
- Pay by the 15th of the following month.
The rates in plain numbers
| Who pays | Rate | On what |
|---|---|---|
| Employee | 0.75% | Gross salary |
| Employer | 3.25% | Gross salary |
| Total | 4.00% | Gross salary |
Note ESI is calculated on gross salary — the whole monthly pay, not just Basic. That's different from PF (which is on Basic). Webelio uses the right figure for each.
Contribution periods
ESI runs in two six-month contribution periods, each linked to a later benefit period when the employee can claim:
| Contribution period | Benefit period |
|---|---|
| April – September | January – June (next year) |
| October – March | July – December (next year) |
The periods matter for one rule: if an employee's gross crosses ₹21,000 in the middle of a period, they stay covered until the period ends, then drop out from the next period. Webelio handles this automatically and flags it when it happens.
ESI is worth having. A covered employee gets medical treatment for the family, paid sick leave, maternity benefit and cover for workplace injury — all for 0.75% of their pay.
The ESI return
- Run and approve payroll for the month.
- Open Reports, find the ESI file, and download it.
- Sign in to the ESIC employer portal and file the monthly contribution.
- Pay the challan by the 15th of the next month.
What's next
- Statutory reports & filing files — download the ESI return and see every deadline.
- Provident Fund — the retirement deduction that usually applies alongside ESI.
- Compliance overview — the full applicability table and calendar.