ESI registration is compulsory for an employer with 10 or more employees anywhere in India, and with even one employee in a hazardous occupation notified by the Centre, under the Code on Social Security 2020 in force from 21 November 2025. It covers employees whose Code wages are up to ₹21,000 a month (₹25,000 for persons with disability), who pay 0.75% while the employer pays 3.25%. ESIC charges nothing to register, and new companies receive their ESIC registration at incorporation through SPICe+.
When does ESI registration become mandatory?
ESI registration becomes mandatory when an establishment, other than a seasonal factory, has 10 or more employees. The Code dropped the old "notified area" test, so the rule now applies across India, and for notified hazardous or life-threatening occupations the threshold is a single employee.
- Below 10 employees, the Code lets an establishment opt in voluntarily, with the consent of the employer and the majority of employees. Plantations, which were outside the old Act, can also opt in.
- The old ESI Act 1948 is gone. ESIC's coverage page still describes factories with 10 or more persons and some categories at 20, but the Code replaced that Act on 21 November 2025.
- District start dates still matter. Contributions begin from the date ESIC starts providing benefits in your district under its notification. One such notification, S.O. 5206(E), brought whole districts in from 1 October 2026, so check your district on the ESIC website.
Which employees does ESI registration cover?
Every employee whose Code wages are ₹21,000 a month or less, or ₹25,000 for a person with disability, must be covered. Code wages, not gross pay, decide this: basic pay, dearness allowance and retaining allowance, plus the part of excluded allowances that exceeds half of total pay.
The Labour Ministry's FAQ No. 12 of 16 March 2026 confirms that the Code's wage definition applies to ESI from 21 November 2025, with the ₹21,000 limit continuing. Coverage then runs in six-month contribution periods, each tied to a later benefit period.
| Contribution period | Cash benefit period |
|---|---|
| 1 April to 30 September | 1 January to 30 June of the next year |
| 1 October to 31 March | 1 July to 31 December of the next year |
An employee whose wages rise above ₹21,000 during a contribution period stays covered until that period ends. ESIC's contribution page also exempts employees with an average daily wage up to ₹176 from the employee share, though the employer still pays; whether the 2026 Rules keep this is not yet confirmed.
Worked example: ESI for a 12-person payroll
Coralbay Logistics LLP, a made-up firm with 12 staff in a covered district, pays ESI of ₹5,688 a month: ₹4,619 as the employer's share and ₹1,069 deducted from 11 employees. Its manager, on Code wages of ₹40,000, falls outside ESI.
| Staff | Basic | Gross | Code wages | Employee 0.75% | Employer 3.25% |
|---|---|---|---|---|---|
| 8 | ₹11,000 | ₹19,000 | ₹11,000 | ₹83 each | ₹358 each |
| 3 | ₹14,000 | ₹36,000 | ₹18,000 | ₹135 each | ₹585 each |
| 1 | ₹40,000 | ₹80,000 | ₹40,000 | Not covered | Not covered |
Example. The three staff on ₹36,000 gross are inside ESI. Their excluded allowances are ₹22,000, which is ₹4,000 more than half of ₹36,000, so ₹4,000 is added to the ₹14,000 basic and Code wages come to ₹18,000. Each share is rounded up to the next rupee, as the PF and ESI calculator does.
How to apply for ESIC registration online
A new company gets its ESIC registration through SPICe+: the Ministry of Corporate Affairs made it mandatory for every company incorporated from 23 February 2020, and ESIC issues no separate number. LLPs, firms, proprietors and older companies apply on the ESIC portal, where a code number is generated on submission, or through the Labour Ministry's Shram Suvidha portal, which PIB also lists as a route.
ESIC's employer registration help file sets out the online steps:
- Sign up on the ESIC portal with the establishment's name, the principal employer, state, region and email address. Login details arrive by email.
- Complete the main unit details: employer type, licence, nature of business, PAN, designations, dispensary details, and the ESIC branch office and inspection division.
- Submit the form. The code number is generated automatically.
- Receive the C-11 registration letter by email. It is computer-generated and needs no signature.
- Register each covered employee and start monthly contributions.
The same help file asks manpower suppliers, security agencies, contractors and Government contractors to pay six months' contribution in advance after the code is generated, so confirm on the portal whether that applies to you. The Labour Ministry's ease-of-doing-business note on the EPFO site says ESIC and EPFO registration carries no cost.
What changed for ESI registration in 2025 and 2026?
The Code on Social Security replaced the ESI Act 1948 from 21 November 2025, along with the EPF Act 1952 and the Employee's Compensation Act 1923. It took ESIC pan-India, made one employee enough in hazardous work, allowed voluntary coverage below 10 and moved contributions onto Code wages.
- The Social Security (Central) Rules 2026 were notified on 8 May 2026.
- The transition period under the Code for ESI ends on 20 November 2026.
- The ₹21,000 ceiling has applied since 1 January 2017 and continues until a new figure is notified.
- The government describes the Codes' aim as a single registration, a single licence and a single return for establishments.
ESI registration vs PF registration
Most growing businesses reach ESI first, at 10 employees, and PF at 20. Both schemes use Code wages and the same monthly due date, but their ceilings, rates and administrators differ.
| Point | ESI (ESIC) | PF (EPFO) |
|---|---|---|
| Compulsory from | 10 employees (1 in notified hazardous work) | 20 employees |
| Wage ceiling | ₹21,000 (₹25,000 for persons with disability) | ₹25,000 from 17 September 2026 |
| Employee share | 0.75% | 12% |
| Employer share | 3.25% | 12%, with 8.33% to EPS up to ₹2,083 |
| Below the threshold | Voluntary, with majority consent | Voluntary, with majority consent |
| Payment due | 15th of the following month | 15th of the following month |
See PF registration for the EPFO side, including the September 2026 wage ceiling change.
Common mistakes with ESI registration
Most errors come from rules that ended with the ESI Act. Check these before your headcount reaches 10.
- Waiting for 20 employees because a state once had a higher threshold for shops.
- Testing coverage on gross pay, which leaves out staff like the three in the example above.
- Assuming a unit with fewer than 10 employees cannot join.
- Ignoring the one-employee rule for notified hazardous work.
- Stopping contributions the month an employee's wages cross ₹21,000.
- Forgetting the state payroll registrations that arrive at the same time, such as professional tax registration.
The business registration checklist lists the other registrations a growing team triggers.
How Ofin handles ESI registration
Ofin's CAs, CSs and legal professionals check your headcount and Code wages, file the employer registration on the ESIC portal and hand over your ESIC registration code and employer login, with support by phone, chat and email, 100% online. The fee is ₹2,899, and monthly contribution support is available as an add-on. We reply within 24 hours: get a fixed-price proposal.
