---
title: "Employee State Insurance"
space: "Frappe HR"
url: "https://docs.frappe.io/hr/india-payroll/employee-state-insurance"
updated: "2026-07-03"
---

# Employee State Insurance (ESIC)

The Employees' State Insurance scheme (ESI) is a mandatory social security scheme under the **ESI Act, 1948**. India Payroll automates ESI contribution calculation and injection into Salary Slips.

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## 1. How to Enable

1. Go to **Payroll Settings → India Payroll** tab.
2. Check **Enable ESIC Deduction**.
3. Optionally enter your **ESIC Registration Number** (appears on the ESIC Register report).
4. Save.

![](/files/image363911.webp)
*Enabling ESI deduction*

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## 2. How It Works

The single contribution row covers **both** shares:


| Share                  | Rate                     |
| ---------------------- | ------------------------ |
| Employee contribution  | 0.75% of gross wages     |
| Employer contribution  | 3.25% of gross wages     |
| **Combined (on slip)** | **4.00% of gross wages** |


:::note
The employer's 3.25% is shown as a single line on the slip for transparency. It is part of the CTC and not a separate payable deduction from the employee's perspective.
:::



## 3. Wage Ceiling


| Category                      | Monthly Gross Wage Ceiling |
| ----------------------------- | -------------------------- |
| General employees             | ₹21,000                    |
| Persons with Disability (PwD) | ₹25,000                    |


The PwD status is read from the `is_person_with_disability` checkbox on the Employee master.

- Employees **at or below** the ceiling are covered (ESI row injected).
- Employees **above** the ceiling are not covered (ESI row removed if previously present).

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## 4. Persons with Disability

To apply the higher ₹25,000 ceiling for a PwD employee:

1. Open the **appropriate Salary Structure Assignment** document.
2. Check **Is Person with Disability**.

![](/files/imagec6a7e8.webp)

The hook reads this field on every slip save, so changing the flag mid-year takes effect on the next payroll run.

## 5. ESIC Card Number

The **ESIC Card No** (IP Number) field is a standard Frappe HR field on the Employee master. It is displayed in the **ESIC Register** report and should be filled for all covered employees for the report to be complete.

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