ESIC Registration in India
The Employees' State Insurance Act, 1948 was enacted to provide social security benefits to Indian workers. The Employee State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labor and Employment, regulates and governs this scheme in India.
ESI is a self-financing social security program designed to provide workers with benefits such as medical care, monetary support, and other welfare services.
This scheme is mandatory for non-seasonal factories and companies with more than 10 employees (or 20 employees in some states), and with employees earning a monthly salary of up to ₹21,000.
Under ESI, the employer contributes 3.25% of the employee's monthly salary, while the employee contributes 0.75%. Employees with a daily salary below ₹176 are exempt from making contributions.
What is ESI Registration?
ESI Registration is an essential process for businesses that need to comply with the Employees’ State Insurance (ESI) scheme under the ESIC Act. This scheme offers crucial medical, financial, and social security benefits to employees, covering illness, injury, maternity, and other life contingencies.
FilingIn makes the registration process seamless and helps businesses stay compliant with ESI regulations.
Who Needs ESI Registration?
Under the ESI Act, it is mandatory for establishments with more than 10 employees (or 20 in certain states) to register for ESI. The scheme applies to employees earning up to ₹21,000 per month (or ₹25,000 for employees with disabilities). This includes businesses in a wide range of industries, from factories and shops to private educational institutions.
Eligible Entities for ESI Registration:
Entities employing 10 or more individuals are required to register for ESI, including:
- Newspaper Establishments
- Private Educational Institutes
- Motor Transport Companies
- Cinemas
- Restaurants and Hotels
- Shops
Applicability and Coverage of ESI:
ESI registration is mandatory for businesses employing 10 or more individuals and with employees earning up to ₹21,000. In some states, the employee threshold is set at 20 employees. ESI provides benefits such as medical care through a wide network of dispensaries and hospitals, and coverage is applicable from the day an employee begins insurable employment.
Employers are required to complete ESI registration within 15 days of becoming applicable.
Industries Covered:
The ESI scheme applies to a wide range of industries, including factories, shops, cinemas, hotels, and more. It covers non-seasonal establishments, ensuring protection for employees in both the public and private sectors.
ESI Monthly Contributions:
Both the employee and employer make monthly contributions to the ESIC fund:
- Employee: 0.75% of their basic wages
- Employer: 3.25% of the employee’s basic wages
Employees earning a daily wage of up to ₹137 are exempt from contribution, but employers must still contribute for these employees.
- Sickness Benefits: Employees receive 70% of their salary during sickness exceeding 91 days, certified by a medical professional.
- Medical Benefits: Full medical care is provided to insured employees and their families, including retirees and disabled employees (with a small annual premium).
- Maternity Benefits: Paid leave for up to 3 months (extendable by 1 month) for women employees during pregnancy, provided they meet certain contribution criteria.
- Deceased Employee Benefits: 90% of the deceased employee’s salary is paid to their family.
- Funeral Expenses: Rs. 10,000 is provided to the family or person performing the funeral rites.
- Retirement Benefits: Ongoing medical care and benefits are provided to employees after retirement.
- Permanent Disablement: If the employee suffers permanent disability, they receive 90% of their salary as a monthly payment.
- Unemployment Benefits: Employees with 3+ years of contributions can receive unemployment benefits and vocational training if they lose their job due to retrenchment, closure, or permanent disability.
No physical documents need to be submitted for online registration, but the following are required during the application process:
- Registration Certificate under the Factories Act or Shops & Establishment Act
- Certificate of Registration for a company or Partnership Deed for a partnership
- Bank statement and cancelled cheque
- License of the establishment
- Memorandum & Articles of Association (for companies)
- Employee list, electricity bill, rent/lease agreement
- PAN card of the business and employees
- Board Resolution and compensation details
- Attendance register, shareholder and director details, etc.
Additional details, such as employee information, insurance numbers, and employer details, are also required.
Steps for ESI Registration:
- Visit the ESIC Portal: Go to the official ESIC website to begin your registration.
- Fill Out the Employer Form: Provide essential details such as your business name, address, and type of establishment.
- Upload Required Documents: Submit documents like your PAN Card, business registration certificate, and a list of employees.
- Submit Your Application: Once all details are reviewed and verified, submit the form to receive your unique 17-digit ESI registration number.
- Distribute ESI Cards: Your employees will be issued ESI cards, allowing them to access health care and other benefits.
ESI Registration Fees:
Fee Type |
Details |
Cost |
|---|---|---|
Professional Fees
|
Standard ESI Registration Package
|
INR 1,950
|
Digital Signature Certificate (DSC)
|
For completing the registration process
|
INR 2,400
|
Registration Fee (By Employee Size)
|
101 to 300 Employees
|
INR 750
|
301 to 500 Employees
|
INR 1,000
| |
501 to 1000 Employees
|
INR 2,500
| |
Reduced Fees for Special Categories
|
SC/ST/PWD/Ex-Servicemen
|
Starting from INR 250
|
Small/Medium Enterprises (SMEs)
|
Varies (depending on region)
| |
Complete Registration Packages
|
Includes all services (compliance, etc.)
|
Starts from INR 5,999
|
Additional Costs
|
Consultation Services
|
Based on needs
|
Annual Compliance Fees
|
Varies (yearly cost)
|
Post-Registration Compliance:
After registration, employers must maintain:
- Attendance register
- Wages register
- Monthly returns and challans submitted by the 15th of the following month
- Accident records and inspection books
Returns and Filing:
Employers must file ESI returns twice a year, along with maintaining records like:
- Employee attendance
- Wage registers
- Accident records
Employers who fail to complete the ESIC registration or submit returns on time will face a penalty of INR 10,000.
Late ESI payments and failure to register can lead to penalties:
- Less than 2 months late: 5% penalty per year.
- 2 to 4 months late: 10% penalty per year.
- 4 to 6 months late: 15% penalty per year.
- More than 6 months late: 25% penalty per year.
Timely filing and contributions ensure that you avoid these additional costs.
FilingIn helps businesses navigate the entire ESI registration process efficiently, ensuring compliance with all regulations. Our team of experts will guide you through every step, from document preparation to post-registration compliance, ensuring smooth operations for your business.
Let FilingIn handle the complexities of ESI registration while you focus on growing your business.
Contact FilingIn today for expert assistance with your ESI registration.
Frequently Asked Questions in India
What is ESI Registration?
ESI Registration is a process that mandates businesses to enroll under the Employees’ State Insurance (ESI) scheme, ensuring employees’ social security benefits like medical care, sickness, maternity, and disability coverage. It is required by law for establishments with more than 10 employees (or 20 in some states).
Who is eligible for ESI registration?
ESI registration is mandatory for businesses with more than 10 employees (or 20 in some states) where employees earn up to ₹21,000 per month (₹25,000 for those with disabilities). The employer must register the business and contribute to the scheme.
How can I register for ESI?
You can register for ESI through the official ESIC portal or FilingIn. You’ll need to submit business and employee details along with required documents such as the PAN card, business registration certificate, and employee list.
What are the documents required for ESI registration?
Documents required for ESI registration include:
- PAN card of the business
- Employee details (name, Aadhaar, contact info)
- Business registration certificate
- Proof of business address (e.g., lease agreement)
- Bank details (e.g., canceled cheque)
- Salary details of employees
How long does it take to complete ESI registration?
ESI registration typically takes about 7-10 working days once all the required documents are submitted and verified.
What benefits does ESI provide to employees?
ESI offers a range of benefits, including:
- Medical benefits: Comprehensive medical care for employees and their families.
- Maternity benefits: Paid leave and medical assistance during pregnancy.
- Disability benefits: Compensation for work-related injuries or illnesses.
- Dependents benefits: Financial support to family members in case of the employee’s death.
How much do employers and employees contribute to ESI?
Employers contribute 3.25% of the employee’s monthly wages to the ESI scheme, while employees contribute 0.75%.
Is ESI applicable to all businesses?
No, ESI applies only to businesses with more than 10 employees (or 20 in some states) and where employees earn up to ₹21,000 per month (₹25,000 for employees with disabilities).
What happens if I miss the ESI registration deadline?
Missing the ESI registration deadline can result in penalties and legal complications. To avoid penalties, make sure you register within the required timeframe.
Can ESI benefits be availed from private hospitals?
No, ESI benefits can only be availed at ESIC-approved hospitals or medical institutions. However, certain private hospitals may be recognized under the scheme for treatment purposes.
How do I file monthly ESI contributions?
Employers must file monthly ESI contributions online via the ESIC portal by the 15th of each month for the previous month’s contribution.
What happens if I don’t file ESI contributions on time?
Late payment of ESI contributions can result in penalties:
- Less than 2 months late: 5% penalty per year
- 2 to 4 months late: 10% penalty per year
- 4 to 6 months late: 15% penalty per year
- More than 6 months late: 25% penalty per year
How can I track my ESI registration status?
You can track your ESI registration status through the ESIC portal by using the Employer Login section or the Common Registration Link.
Are all employees eligible for ESI benefits?
Only employees earning up to ₹21,000 per month (₹25,000 for employees with disabilities) are eligible for ESI benefits. Both full-time and part-time employees are covered if they meet these criteria.
Can an employee apply for ESI benefits without an ESI card?
No, employees must have a valid ESI card to avail of the benefits under the scheme. After registration, an ESI card is issued to each eligible employee for accessing medical services and other benefits.
