ESIC for Employers: Rules, Rates and Coverage 2026
What ESIC Is
The Employees’ State Insurance Corporation (ESIC) runs a health and income-protection scheme for employees on lower wages. Covered employees and their families get medical care, and the employee gets cash benefits during sickness, maternity, disablement from an employment injury, and dependants’ benefit if a covered employee dies from one.
The scheme was set up under the Employees’ State Insurance Act, 1948. From 21 November 2025, that Act is part of the Code on Social Security, 2020, which now governs ESIC alongside PF, gratuity and maternity benefit.
Who Must Register
- Factories employing 10 or more persons.
- Establishments notified by the State Government that employ 10 or more persons: shops, hotels, restaurants, cinemas, road transport undertakings, newspaper establishments, private medical and educational institutions.
Every employee counts towards the 10, including those earning above the wage limit. Once you reach the threshold, register the establishment on the ESIC portal. Your liability starts from the date ESIC became applicable, not from the date you register, so late registration means back contributions. Step-by-step: ESIC registration process for employers.
Which Employees Are Covered
Employees whose wages are up to ₹21,000 a month are covered (₹25,000 for persons with disability). This limit has applied since 1 January 2017.
ESIC Contribution Rates 2026
| Who pays | Rate | On what |
|---|---|---|
| Employer | 3.25% | Wages of each covered employee |
| Employee | 0.75% | Their wages, deducted from salary |
| Total | 4% |
These rates apply from 1 July 2019. Employees whose average daily wage is up to ₹176 pay nothing; the employer still pays its 3.25% for them.
Example: an employee earns ₹18,000 a month. Employer share: ₹585. Employee share: ₹135 (deducted from salary). Total deposited: ₹720.
For a side-by-side view of PF and ESIC deductions, see How PF and ESIC work in India.
What Employers Must Do Every Month
- Register new joiners on the portal and generate their insurance (IP) number from the date of joining.
- Calculate contributions on each covered employee’s wages for the month.
- Pay by the 15th of the following month through the challan generated on the ESIC portal.
- Record exits so contributions stop for employees who leave.
- Keep records: the register of employees, attendance and wage registers, ready for inspection.
What Changed for Employers in 2025 and 2026
- New law: since 21 November 2025, ESIC obligations come from the Code on Social Security, 2020. The rates and wage limit above did not change.
- Central rules: the Code on Social Security (Central) Rules, 2026 were notified in May 2026; several states are still notifying their own rules, so check your state’s position.
- Aadhaar seeding drive: on 21 October 2026, ESIC headquarters directed its regional offices to run a one-month drive to link Aadhaar for insured employees and their families, including camps arranged with employers. Expect your ESIC office to contact you if many of your employees are not yet linked.
Common ESIC Mistakes
- Registering late and then facing back contributions for the whole period.
- Leaving regular allowances out of the wages used for ESIC.
- Not generating IP numbers for new joiners from day one, which blocks their benefits.
- Paying after the 15th, which attracts interest.
- Mismatched Aadhaar or bank details, which cause problems when an employee claims a benefit.
Frequently Asked Questions
Is ESIC mandatory for 10 employees?
Yes, for factories and notified establishments that employ 10 or more persons.
What is the ESIC wage limit in 2026?
₹21,000 a month, or ₹25,000 for persons with disability.
What is the employer share of ESIC?
3.25% of the wages of each covered employee. The employee pays 0.75%.
When is ESIC due?
By the 15th of the month after the wage month.
Where do employers log in?
On ESIC’s official employer portal at portal.esic.gov.in, linked from esic.gov.in.
Does ESIC still apply under the Labour Codes?
Yes. Since 21 November 2025 it runs under the Code on Social Security, 2020, with the same rates and wage limit.
Need Help Running ESIC Every Month?
TMS manages ESIC registration, monthly contributions, new-joiner IP numbers and inspections for employers across India, alongside PF, PT and LWF.
- Statutory compliance: PF, ESIC, PT, LWF and labour-law filings under the Codes now in force.
- Payroll outsourcing: accurate deductions and contributions every cycle.