Overview

What is a ESI Registration?

The Employees' State Insurance (ESI) Scheme is a comprehensive social security and health insurance scheme for workers in India. It provides medical, monetary, and other benefits during sickness, maternity, disablement, and death due to employment injury

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EMPLOYEES' STATE INSURANCE (ESI)

Registration & Return — A Comprehensive Note

Governed by the Employees' State Insurance Act, 1948 | Administered by ESIC

1. Salient Features of ESI

1.1 Governing Law & Authority

Governed by the Employees' State Insurance Act, 1948 and the ESI (Central) Rules, 1950.
Administered by the Employees' State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour & Employment.
ESIC operates its own network of hospitals, dispensaries, and panel clinics across India.

1.2 Applicability

Mandatory for every non-seasonal factory employing 10 or more persons using power.
Mandatory for establishments (shops, hotels, restaurants, cinemas, road transport, etc.) employing 10 or more persons in States where the scheme has been extended by notification.
Some States have extended applicability to establishments with 20 or more employees — the threshold varies.
Once covered, the establishment continues to be covered even if the employee count later falls below the threshold.
Employees drawing wages up to Rs. 21,000 per month are covered (Rs. 25,000 per month for persons with disability).

1.3 Contribution Rates

Contributor	Rate of Contribution	Remarks
Employee	0.75% of Wages	Employees earning up to Rs. 176/day are exempt from contribution
Employer	3.25% of Wages	Payable on wages of all covered employees
State Government	1/8th of expenditure on medical benefit	Subject to a per-capita ceiling fixed by ESIC
Central Government	Subsidises cost of certain administrative expenses	As per Section 28 of ESI Act

Note: 'Wages' for ESI purposes includes basic pay, dearness allowance, HRA, overtime, and all other allowances — but excludes annual bonus, retrenchment compensation, encashment of leave, and gratuity.

1.4 Contribution Periods & Benefit Periods

Period Type	Contribution Period	Corresponding Benefit Period
First Period	1st April to 30th September	1st January to 30th June (following year)
Second Period	1st October to 31st March	1st July to 31st December (same year)

1.5 Benefits Available to Insured Persons

Benefit	Eligibility	Amount / Extent
Sickness Benefit	78 days of contribution in 2 contribution periods	70% of average daily wages for up to 91 days per year
Extended Sickness Benefit	Continuous sickness for 91 days + 2 years of coverage	80% of wages for up to 2 years for 34 specified diseases
Maternity Benefit	70 days contribution in 2 preceding periods	100% of wages for 26 weeks (normal); 6 weeks (miscarriage)
Disablement Benefit	No minimum contribution required	90% of wages for temporary / permanent disablement
Dependants' Benefit	Death due to employment injury	90% of wages as monthly pension to dependants
Medical Benefit	From day 1 of insurable employment	Full medical care for IP and family — no cash limit
Funeral Expenses	Death of insured person	Lump sum of Rs. 15,000
Unemployment Allowance (ABVKY)	3+ years of insurable employment	50% of wages for up to 2 years on involuntary job loss

1.6 Insurance Number & Pehchan Card

Every covered employee is allotted a unique 17-digit Insurance Number (IP Number) by ESIC.
A Pehchan Card (smart card / e-Pehchan) is issued which serves as the identity card for availing medical benefits.
The IP and family members can access medical treatment at ESIC hospitals and panel clinics by presenting the Pehchan Card.
From April 2016, coverage is also linked with Aadhaar for seamless benefit delivery.

1.7 Other Key Provisions

Medical benefit extends to retired and permanently disabled insured persons on payment of a nominal annual contribution.
Employer is not liable to pay wages to an employee during sickness / maternity — ESI payments substitute wages.
An IP cannot claim both ESI maternity benefit and Maternity Benefit Act benefit simultaneously.
Apprentices, trainees under NAPS/NATS, and casual employees engaged in non-perennial work are excluded from ESI coverage.
Seasonal factories (operating for less than 7 months per year) are exempt from ESI.

2. Documents Required

2.1 For Employer (Establishment) Registration

Sr.	Document	Details / Purpose
1	PAN Card of Establishment / Owner	PAN of company, LLP, partnership firm, or proprietor
2	Certificate of Incorporation / Registration	For companies — MCA certificate; for others — relevant registration proof
3	GST Registration Certificate	GSTIN of the establishment (if applicable)
4	Trade Licence / Municipal Certificate	Licence issued by local municipal body or panchayat
5	Shops & Establishment Certificate	Registration under respective State S&E Act
6	Address Proof of Establishment	Electricity bill / telephone bill / lease deed / property tax receipt
7	Bank Account Proof	Cancelled cheque or bank account statement in entity name
8	List of Directors / Partners / Proprietor	Names, PAN, and residential address of all owners / directors
9	Memorandum & Articles of Association	For companies; Partnership Deed for firms
10	Specimen Signature of Authorised Signatory	Person authorised to file returns and sign challans
11	Employee Details (at time of registration)	Name, DOB, gender, DOJ, salary, Aadhaar, bank details
12	Wage Register / Salary Slip	To determine date of coverage and wages paid
13	Factory Licence (if applicable)	For factories covered under the Factories Act, 1948
14	Contract Labour Agreement (if applicable)	If principal employer engages contract workers

2.2 For New Employee Enrollment

Form 1 (Employee's Declaration Form) — Filled and signed by new employee at the time of joining.
Aadhaar Card — Mandatory for biometric KYC and linking of IP Number.
Two recent passport-size photographs — For Pehchan Card issuance.
Bank Account Passbook / Cancelled Cheque — For direct benefit transfer of cash benefits.
Family Declaration (Form 1A) — Details of spouse, children, and dependent parents for medical benefit extension.
Previous IP Number (if any) — For continuity of coverage in case of re-employment.
Date of Joining and Wage Details — For accurate contribution calculation and IP registration.

3. Registration Process — Step-by-Step

Step 1: Determine Coverage — Count total employees (including contract, temporary, and part-time workers) on the payroll. If the count reaches the applicable threshold (10 or 20 depending on the state and nature of establishment), ESI registration becomes mandatory. The date of coverage is the date on which the establishment first crossed the threshold. Registration must be done within 15 days of becoming coverable under the ESI Act. Check whether your establishment falls in an ESI-implemented area (Notified Area) at www.esic.in.
Step 2: Create Employer Account on ESIC Portal — Visit the ESIC Employer Portal. Click 'Sign Up' under the Employer section to create a new account. Enter establishment details, PAN, and contact details. Credentials will be emailed, allowing access to the dashboard.
Step 3: Fill & Submit Registration Form (Form 01) — Navigate to 'Registration' > 'New Registration' on the dashboard. Fill Form 01 with complete details including entity type, address, employee count, and wage structure. Upload supporting documents (PDF/JPEG, < 1 MB each) and submit.
Step 4: Allotment of 17-digit Employer Code — Upon successful submission, ESIC allots a unique 17-digit Employer Code Number. Format: State (2) + Region (2) + District (2) + Type (1) + Serial (7) + Check Digit (1). Preserve this code for all future filings.
Step 5: Register Employees & Obtain IP Numbers — Navigate to 'Employee' > 'Add Employee' on the portal. Enter employee details to automatically generate a 17-digit IP Number. Collect signed Form 1, upload Form 1A, and generate Temporary Identity Certificates (TIC). Pehchan Cards are dispatched within 30–60 days.
Step 6: Pay Monthly Contributions — Navigate to 'Online Challan Generation'. Enter monthly wages; the portal auto-calculates employee (0.75%) and employer (3.25%) contributions. Pay online via SBI Collect, NEFT, or authorised banks by the 15th of the following month. Late payment attracts 12% p.a. interest and damages.
Step 7: File Half-Yearly Returns — Navigate to 'Returns' > 'Submit Return' on the portal. File Return of Contributions (Form 5) twice a year (by 12th November for Apr–Sep, and 12th May for Oct–Mar) and preserve the acknowledgment receipt.

4. ESI Returns — Filing Requirements

4.1 Monthly Contributions (Challan)

Monthly wage details must be submitted online for all covered employees.
The portal computes contributions automatically on entering wages.
Challan is generated and paid online — no paper challan is required. Due Date: 15th of the following month.
Nil return / challan must be filed even if no wages were paid in a month.

4.2 Half-Yearly Return — Form 5

Return	Period Covered	Due Date	Filed Via
Return I (Form 5)	April 1 – September 30	12th November	ESIC Online Portal
Return II (Form 5)	October 1 – March 31	12th May	ESIC Online Portal

Form 5 captures: establishment details, employer code, employee count, total wages, contributions deducted and deposited, and arrears.

4.3 Other Compliance Forms

Form	Name	Purpose & Timing
Form 01	Employer Registration Form	Filed at time of registration
Form 01-A	Annual Information Return	Annual statement — filed by 31st March
Form 1	Employee Declaration Form	Filed for each new employee at joining
Form 1A	Family Declaration	Family details for medical benefit extension
Form 1B	Changes in Family Details	Reporting subsequent family composition changes
Form 3	Return of Declaration Forms	Consolidated return of Form 1s collected
Form 5	Return of Contributions	Half-yearly return — filed twice a year
Form 6	Register of Employees	Maintained on premises for inspection
Form 7	Register of Accidents	Record of employment injuries
Form 11	Accident Book	Record of all employment accidents
Form 12	Register of Employees (Alt.)	Alternate register for computerised payroll

5. Penalties & Consequences of Non-Compliance

Default / Violation	Consequence Under ESI Act
Non-registration / delayed registration	Fine up to Rs. 5,000 + compulsory registration by ESIC
Failure to pay contribution on time	Interest @ 12% p.a. (Section 39(5)(a))
Damages for continued default	Damages @ 5% to 25% of arrears depending on period (Sec. 85B)
Non-submission of returns (Form 5)	Fine up to Rs. 2,000 per default (Section 85)
Failure to maintain registers	Fine up to Rs. 1,000 (Section 85)
Deducting employer share from wages	Fine up to Rs. 1,000 (Section 72)
Reduction of wages due to ESI coverage	Fine up to Rs. 1,000 (Section 72)
Obstructing an ESIC Inspector	Imprisonment up to 2 years or fine up to Rs. 5,000 (Section 84)
False statement or misrepresentation	Imprisonment up to 6 months or fine up to Rs. 2,000 (Section 84)
Second or subsequent offence	Double penalty of first offence as per Section 85A

6. Frequently Asked Questions (FAQs)

Q: Is ESI registration mandatory even for establishments with fewer than 10 employees? +

Ans. No — ESI registration is mandatory only for establishments employing 10 or more persons (20 in some states). However, any establishment below the threshold may voluntarily register under the ESI Scheme. Once covered, the establishment remains covered even if the headcount subsequently falls below the threshold.

Q: What is the wage ceiling for ESI coverage, and who determines it? +

Ans. Employees drawing gross wages up to Rs. 21,000 per month are covered under ESI (Rs. 25,000 per month for persons with disability). The wage ceiling is prescribed by the Central Government and revised periodically. Once an employee's wages exceed the ceiling, they are exempted from ESI coverage from the following contribution period.

Q: Which employees are excluded from ESI coverage? +

Ans. The following categories are excluded: (1) Employees earning above the wage ceiling (Rs. 21,000/month); (2) Apprentices engaged under the Apprentices Act, 1961; (3) Trainees under NAPS / NATS schemes; (4) Workers in seasonal factories operating for less than 7 months; (5) Daily wage workers in non-perennial establishments; (6) Employees of establishments not covered by notification in their area.

Q: Within how many days must an employer register after reaching the threshold? +

Ans. An employer must register within 15 days of the date on which the establishment first employs the threshold number of workers (10 or 20 as applicable). This is stricter than PF, which allows 30 days. Delayed registration attracts penalty and ESIC can register the employer suo motu.

Q: Can ESI contributions be paid offline? +

Ans. While the contribution challan is generated online on the ESIC portal, payment can be made at SBI branches authorised by ESIC, or via NEFT/RTGS/internet banking. There is no fully offline process — the challan generation step is always online. Physical submission of paper returns has been discontinued.

Q: What medical benefits does a covered employee's family get? +

Ans. The insured person's spouse, children (up to age 25 if studying; no age limit for unmarried disabled child), and parents who are wholly dependent on the IP are eligible for full medical care — including OPD, IPD, surgery, and specialist treatment — at ESIC hospitals and empanelled clinics. There is no cap on the cost of medical treatment.

Q: What is the Atal Bimit Vyakti Kalyan Yojana (ABVKY) under ESIC? +

Ans. ABVKY is a relief scheme launched by ESIC for insured workers who lose their jobs due to retrenchment, closure of factory, or involuntary unemployment. Eligible workers who have been in insurable employment for at least 3 years can claim 50% of their average per-day earnings as unemployment allowance for up to 24 months. The claim must be filed within 30 days of unemployment.

Q: How is the maternity benefit calculated under ESI? +

Ans. Maternity benefit under ESI is 100% of the average daily wages of the insured woman for 26 weeks from the date of confinement (normal delivery). For miscarriage or medical termination, it is paid for 6 weeks. The benefit is paid by the ESIC branch office directly — the employer is not required to pay wages during the maternity leave period if ESI benefit is being availed.

Q: What is the difference between ESI and the Maternity Benefit Act, 1961? +

Ans. Establishments covered under ESI are exempt from the Maternity Benefit Act, 1961 for covered employees. ESI pays 100% of wages as maternity benefit, while the Maternity Benefit Act mandates the employer to pay. The employee cannot claim both simultaneously. However, if the employer has employees above the ESI wage ceiling, the Maternity Benefit Act applies to them.

Q: What records must an employer mandatorily maintain under ESI? +

Ans. An employer must maintain the following registers on the premises: (1) Form 6 — Register of Employees; (2) Form 7 — Register of Accidents; (3) Form 11 — Accident Book; (4) Attendance Register; (5) Wage Register showing deduction of ESI contributions; (6) Copies of all challans and Form 5 returns. These must be produced on demand to an ESIC Inspector.

Q: Can an employee covered under ESI also avail of health insurance from an employer-sponsored policy? +

Ans. Yes — the employer may provide additional medical / health insurance benefits to employees beyond what ESI provides. However, since the establishment is already covered under ESI, the ESI contributions are still mandatory and cannot be replaced by a private health insurance policy. The two schemes operate independently.

Q: Is a principal employer liable to pay ESI contributions for contract workers? +

Ans. Yes. Under Section 17 of the ESI Act, if the contractor fails to pay ESI contributions for the workers deployed at the principal employer's premises, the principal employer is liable to pay the contributions and can subsequently recover the amount from the contractor. It is advisable for principal employers to verify ESI compliance of contractors regularly.

Q: What happens if an insured employee's wages increase above the ceiling during a contribution period? +

Ans. If an employee's wages cross Rs. 21,000 per month during a contribution period, they continue to be covered (and contributions are paid) until the end of that contribution period (i.e., till 30th September or 31st March). They become exempt from ESI only from the start of the following contribution period.

This note is prepared for general reference purposes only. For specific legal advice, consult a qualified ESI practitioner or refer to the official ESIC website at www.esic.in.

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