ESI: Definition, Meaning & Guide for Indian Businesses

ESI (Employees' State Insurance) is the social security scheme covering medical care, sickness, maternity and disability for employees earning under ₹21,000/month.

What is ESI?

Employees' State Insurance (ESI) is administered by ESIC. Applicable to factories with 10+ employees and other establishments with 10-20+ employees (state-specific). Employer contributes 3.25% of gross salary and employee 0.75% (changed from 4.75%/1.75% in 2019). Salary ceiling: ₹21,000/month gross (₹25,000 for disabled). Provides cash benefits during sickness (70% of wages for 91 days/year), maternity (26 weeks paid), and free medical treatment at ESI hospitals/dispensaries.