ESIC in 2026: 3.25% employer and 0.75% employee, Rs 21,000 limit, benefits and a 20 November deadline
25 October 2026 · 2 min read · HireHo
Based on Tally Solutions, factoHR and Bhatt and Joshi Associates explainers. The wage-limit increase discussed is a proposal, not a notified change. Summarised in our own words.
3.25% + 0.75%employer and employee share (4% total)
Rs 21,000monthly wage limit for coverage
20 Nov 2026transition period under the Code ends
ESIC, the Employees' State Insurance scheme, gives medical and cash benefits to workers earning up to a set wage. Sources we read say rates are unchanged in 2026: the employer pays 3.25% and the employee 0.75% of gross wages, 4% in total, a rate set in July 2019.
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Who is covered
- Workers earning up to Rs 21,000 a month (Rs 25,000 for persons with disabilities). This limit has not changed since 1 January 2017.
- Factories with 10 or more employees, and shops and commercial establishments at 10 or more in most states (Maharashtra and Chandigarh use 20).
- Workers with an average daily wage up to Rs 176 do not pay their own share, but the employer still pays its share.
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What workers get
- Medical care from day one of employment.
- Sickness benefit at 70% of wages for up to 91 days a year, longer for notified long-term diseases.
- Maternity benefit of full wages for 26 weeks, subject to conditions.
- Disablement and dependants' benefit at 90% of wages, paid monthly.
- Funeral expense of Rs 15,000.
Due date
Employers must pay contributions through the ESIC portal by the 15th of the following month.
What is changing
- The ESI Act, 1948 was folded into the Code on Social Security from 21 November 2025. Old ESI rules continue for one year, until 20 November 2026. Replacement rules had not been notified in the source we used.
- The Social Security (Central) Rules, 2026 introduced registration from Day 1 of employment.
- Raising the Rs 21,000 limit to Rs 25,000 or Rs 30,000 has been discussed but, as of June 2026, no formal notification had been issued.
If the limit goes up
More workers would become insured and get benefits, but employers' payroll costs would rise because of the 3.25% share. Employers should watch the Gazette.
SourcesTally Solutions: ESI contribution rate 2026factoHR: ESI Act 1948, applicability and the 2026 transition deadlineBhatt and Joshi Associates: ESIC wage ceiling change, what it would mean for employersHireHo explains these reports in its own words. Figures belong to the sources above.
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