ESI Calculation in Excel (0.75% / 3.25%)

Q: What is the ESI contribution rate in 2026?

0.75% from the employee and 3.25% from the employer, on gross wages, for a combined 4%.

Q: What is the ESI wage limit?

₹21,000 gross per month. For employees with disability, the threshold is ₹25,000 per month — consistently reported across ESIC sources; confirm against the ESIC notification if applying this exemption.

Q: Is ESI calculated on gross or basic salary?

On gross wages — the total of all monthly earnings — not on Basic + DA.

Q: What happens if salary crosses ₹21,000 mid-year?

ESI continues until the end of the current contribution period (30 September or 31 March) and stops only from the next period. ---

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Last updated: 27 June 2026 · Rates unchanged for 2026.

ESI in Excel is 0.75% of gross wages from the employee and 3.25% from the employer, applicable only while the employee's gross is ₹21,000 per month or less (₹25,000 for employees with disability). The employee column is a single =IF(Gross<=21000, ROUND(Gross*0.75%,0), 0). Once an employee crosses the threshold, ESI continues until the end of the running contribution period, then stops.

Key takeaways

Employee ESI: 0.75% of gross wages.
Employer ESI: 3.25% of gross wages.
Threshold: gross ≤ ₹21,000/month (₹25,000 for employees with disability).
ESI is on gross, not Basic+DA — unlike EPF.
Contribution periods: April–September and October–March; coverage runs to period-end if salary crosses mid-period.
Low-wage relief: if daily average wage ≤ ₹176, the employee's share is waived but the employer still pays 3.25%.

Fact box. ESI is calculated on gross wages, not on Basic + DA. The employee contributes 0.75% and the employer 3.25%, for a combined 4%, while gross monthly wages are ₹21,000 or less. (Source: ESIC.)

How is ESI calculated in Excel?

With Gross in column H:

Contribution	Formula	On ₹18,000 gross
Employee ESI (0.75%)	`=IF(H2<=21000,ROUND(H2*0.75%,0),0)`	₹135
Employer ESI (3.25%)	`=IF(H2<=21000,ROUND(H2*3.25%,0),0)`	₹585

The IF switches the deduction off the moment gross exceeds ₹21,000 — but see the contribution-period rule below before turning it off mid-period.

Fact box. ESI follows two fixed contribution periods — April to September and October to March. If an employee's wages cross ₹21,000 in the middle of a period, ESI continues to be deducted until the period ends; it only stops from the start of the next period. (Source: ESIC.)

Why is ESI on gross, not basic?

EPF uses Basic + DA, but ESI uses gross wages — the total of all earnings paid that month (basic, DA, HRA, allowances, overtime). This matters because an employee can be above the EPF wage base but still under the ₹21,000 ESI threshold, or vice versa, so the two deductions are computed on different figures in the same salary sheet.

Keep a separate Gross column and reference it in the ESI formula; do not reuse the EPF BasicDA cell.

How do I handle the contribution-period rule in Excel?

The clean way is a per-period coverage flag rather than a plain IF on this month's gross. Add a column ESI_Applicable (Yes/No) that you set when an employee first crosses ₹21,000, and keep it "Yes" until the period boundary (30 Sep or 31 Mar). Then:

=IF(ESI_Applicable="Yes", ROUND(Gross*0.75%,0), 0)

This prevents wrongly stopping ESI the same month the salary rises.

How to build the ESI columns step by step

Ensure a Gross column exists (sum of earnings).
Put the rates (0.75%, 3.25%) and threshold (21000) on the Settings sheet.
Add Employee ESI = =IF(Gross<=21000,ROUND(Gross*0.75%,0),0).
Add Employer ESI = =IF(Gross<=21000,ROUND(Gross*3.25%,0),0).
For employees near the threshold, add an ESI_Applicable flag for the contribution-period rule.
Total both columns for the monthly ESI challan (due by the 15th).

How Ankeshan helps: Ankeshan applies the ₹21,000 threshold and the contribution-period rule automatically inside Excel, so an employee who crosses the limit mid-period keeps the correct ESI until the period ends. (Launching soon — join the waitlist.)

Frequently asked questions

What is the ESI contribution rate in 2026? 0.75% from the employee and 3.25% from the employer, on gross wages, for a combined 4%.

What is the ESI wage limit? ₹21,000 gross per month. For employees with disability, the threshold is ₹25,000 per month — consistently reported across ESIC sources; confirm against the ESIC notification if applying this exemption.

Is ESI calculated on gross or basic salary? On gross wages — the total of all monthly earnings — not on Basic + DA.

What happens if salary crosses ₹21,000 mid-year? ESI continues until the end of the current contribution period (30 September or 31 March) and stops only from the next period.

Sources

ESIC — esic.gov.in (contribution rates, wage threshold, contribution periods).

General information, not professional advice. Verify on the official portal for your case. Reviewed by a Chartered Accountant; last updated 27 June 2026.