ESIC setup + monthly filings

Category: Payroll & HR Compliance. From ₹1,999. Typical timeline: 5–7 days.

Overview

ESI registration brings a business under the Employees' State Insurance scheme, mandatory for establishments employing the threshold number of workers earning up to the wage ceiling, and provides employees medical, sickness, maternity and disability benefits funded through a small joint contribution. Registration through the ESIC portal is followed by a recurring monthly return and contribution cycle that must be maintained for as long as covered employees remain on the payroll.

Who needs it

• Businesses crossing the applicable employee threshold for the first time in their state
• Factories, shops and establishments with employees below the ESI wage ceiling
• Companies needing ongoing monthly ESI contribution and return filing support

Eligibility

• Establishments employing 10 or more persons in most states (the threshold is 20 in a few states) drawing wages up to the ESI ceiling
• Factories and specified classes of establishments — shops, hotels, cinemas, road transport — notified under the Act in the relevant state
• Employees earning gross wages up to ₹21,000 per month (₹25,000 for persons with disability) who fall within the mandatory coverage limit

Documents required

• PAN of the establishment and certificate of incorporation/registration
• GST registration certificate, where applicable
• Bank account details of the establishment
• List of employees with wages, date of joining and family details
• Address proof of the registered establishment
• Digital signature certificate of the authorised signatory

Process

1. Applicability check — Confirm the state-specific employee threshold and wage ceiling to determine ESI applicability.
2. Online registration — Register the establishment on the ESIC portal to obtain the 17-digit ESI code number.
3. Employee enrolment — Enrol eligible employees and generate their ESI Insurance Number and e-Pehchan card details.
4. Contribution computation — Compute monthly employer (3.25%) and employee (0.75%) contribution on gross wages.
5. Monthly return and payment — File the monthly contribution return and remit payment through the ESIC portal by the 15th of the following month.

Government fees

• ESI Registration (ESIC Portal): Nil — no government fee for registration
• Monthly ESI Contribution: 3.25% employer + 0.75% employee of gross wages (statutory contribution rate, not a fee)

Professional fee

Professional fee starts at ₹1,999 covering ESI registration, employee enrolment and setup of the first monthly contribution filing.

Timeline

ESI registration is typically completed within 5-7 working days of submitting complete documents, with monthly contribution filing continuing thereafter as a recurring obligation.

Deliverables

• ESI establishment registration with the 17-digit code number
• Employee-wise ESI Insurance Number and e-Pehchan enrolment
• Monthly contribution return and payment challan
• ESI compliance calendar for the establishment

Frequently asked questions

What is the current wage ceiling for mandatory ESI coverage?

Employees earning gross wages up to ₹21,000 per month are covered under ESI, with the ceiling raised to ₹25,000 for persons with disability.

Is the employee threshold for ESI the same in every state?

No — most states apply a 10-employee threshold for non-seasonal factories and establishments, though a few states retain a 20-employee threshold, so applicability should be checked state-wise.

What benefits can an employee claim under ESI?

Covered employees and their dependents can access medical treatment, sickness benefit, maternity benefit, disablement benefit and dependent benefit, funded through the joint employer-employee contribution.

Common mistakes

• Delaying registration after crossing the applicable employee threshold, exposing the business to backdated contribution liability
• Excluding employees near the wage ceiling from coverage without verifying gross wage calculation correctly
• Filing the monthly contribution late, attracting interest and potential damages
• Not updating employee family details, delaying dependents' access to ESI benefits

Penalties for non-compliance

• Interest at 12% per annum for delayed payment of ESI contribution
• Damages under Section 85B ranging up to 25% per annum on a graded scale based on the period of default
• Prosecution under Section 85 for continued failure to pay contributions or file returns

Legal references

• Employees' State Insurance Act, 1948 — establishes the ESI scheme and coverage requirements
• Section 2(12) — establishments to which the Act applies based on employee count
• Section 85B — damages for default in payment of contribution
• ESI (Central) Rules, 1950 — wage ceiling and contribution rate notifications