ESI is government manadated health insurance for employees with a salary below Rs 21,000 per month. It is compulsory for organizations with more than 10 employees.
If ESI is enabled for your organization, then Opfin will automatically add ESI deductions to your employees who qualify for it. ESI can be disabled for specific employees, but we highly discourage this unless you have a very specific reason to do so.
If an employee's salary is increased above the threshold, the ESI contribution does not stop immediately. For an employee who is already contributing to ESI, contribution can stop only in April and October of every year and XPayroll will automatically stop contribution in these months if an employee's salary is increased.
The employee and employer contribution are 0.75% and 3.25% respectively. ESI is calculated on total earnings every month (excluding any employer contribution to PF/ESI, if included in the employee's CTC).