Basis for Calculation

• The ESIC amount is calculated on the basis of gross monthly wages.
  
• Wages include basic pay, dearness allowance, and other regular allowances.
  
• Irregular components like annual bonuses or reimbursements are excluded.
  
• The total gross wage must not exceed the applicable wage ceiling.
  
• The ceiling is ₹21,000 per month for general employees and ₹25,000 for persons with disabilities.
  

Employer’s Contribution

• The employer contributes 3.25% of the gross wages of each eligible employee.
  
• This amount is calculated individually for every covered employee.
  
• The contribution is rounded off to the nearest rupee where applicable.
  
• Employers must calculate this monthly before the 15th of the following month.
  
• The total amount is deposited along with the employee’s share.
  

Employee’s Contribution

• The employee contributes 0.75% of their gross wages.
  
• This amount is deducted directly from the monthly salary.
  
• Employees earning less than ₹176 per day are exempt from their share.
  
• For all other eligible employees, this deduction is mandatory.
  
• The deducted amount is combined with the employer’s share for deposit.
  

Calculation Example Structure

• Multiply gross wages by 3.25% to get the employer’s contribution.
  
• Multiply the same gross wages by 0.75% to get the employee’s contribution.
  
• Add both amounts to determine the total monthly ESIC contribution.
  
• Maintain monthly records of the breakdown for compliance.
  
• Use payroll software or a worksheet for accuracy and consistency.
  

Monitoring and Adjustments

• Contributions must be recalculated each month based on actual wages paid.
  
• If an employee’s salary changes, the ESIC amount must be adjusted accordingly.
  
• Overtime, attendance bonuses, or shift allowances are to be included.
  
• Employees crossing the wage ceiling mid-cycle continue for that period.
  

Proper classification and payroll records ensure error-free compliance.