Master Making ESIC Payments Online: understanding the FY 2025-26 contribution rates

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For any business owner or HR manager in India, the 15th of every month brings a familiar stress: statutory compliance deadlines. Among these, the Employees’ State Insurance Corporation (ESIC) payment is critical. A missed deadline doesn’t just mean a slap on the wrist; in 2026, with the digital integration of labour codes, it triggers immediate interest penalties and scrutiny.

As a Chartered Accountant with over 15 years in payroll compliance, I’ve seen businesses pay lakhs in avoidable fines simply because they fumbled the online challan generation or missed a minor update in the wage definition.

Prerequisites Before You Log In

Before attempting to generate a challan, ensure you have the following ready to avoid session timeouts:

  1. ESIC Employer Code: Your 17-digit unique establishment code.
  2. Login Credentials: User ID and Password for the ESIC Portal.
  3. Employee Data: An Excel sheet containing the IP Number (Insured Person number), Name, and “Wages” for all employees.
  4. Net Banking Access: Preferably SBI or any major scheduled bank authorized for tax payments.

CA Pro Tip: Under the new SPREE 2025 Scheme (extended to Jan 31, 2026), if you were previously unregistered, you might have a window to register without past liability. Check your eligibility immediately.

ESIC Contribution Rates & Due Dates (FY 2025-26)

The contribution rates remain steady, but the definition of wages on which these rates are calculated has evolved.

Current Contribution Table

CategoryShare (% of Wages)Remarks
Employer’s Share3.25%Cost to the company.
Employee’s Share0.75%Deducted from salary.
Total Contribution4.00%Remitted to ESIC.
  • Due Date: On or before the 15th of the following month (e.g., April contributions are due by May 15th).
  • Wage Ceiling: ₹21,000 per month (₹25,000 for persons with disabilities).
  • Exemption: Employees with a daily average wage of ₹176 or less are exempt from their 0.75% share, but the employer must still pay their 3.25%.

Step-by-Step Guide to Make ESIC Payment Online

Follow this exact workflow to generate your monthly challan without errors.

Step 1: Portal Login

Visit www.esic.gov.in and click on “Employer Login”. Enter your 17-digit code and captcha.

Step 2: Access Monthly Contribution

Once on the dashboard, look for the “Monthly Contribution” link under the ‘Transaction’ module.

  • Select the Month and Year (e.g., January 2026).
  • Click Submit.

Step 3: Upload Employee Data

You have two options here:

  1. Manual Entry: Good for small teams (<10 employees). Enter the name, IP number, and wages manually.
  2. Excel Upload (Recommended): Download the sample template. Fill in the IP numbers and wages. Upload the file.
    • Note: Ensure the file is in .xls format (not .xlsx) to avoid upload errors.

Step 4: Verify and Submit

The portal will calculate the 3.25% and 0.75% automatically.

  • Cross-verify the total wages with your internal payroll register.
  • Click “Submit” to freeze the contribution data.

Step 5: Generate Challan

After submission, click on “Generate Challan”.

  • A summary screen will appear.
  • Click “Pay Online”. Note down the Challan Number immediately.

Step 6: Payment Gateway

Select your bank (SBI is the default aggregator) and complete the transaction via Net Banking.

  • Success: You will see a “Payment Successful” receipt. Print this for your records.
  • Failure: Do not panic. Wait for 20 minutes. Go to the “Double Verification” link on the dashboard, enter the Challan Number, and check the status before attempting to pay again.

Critical 2026 Update: The “Wage” Definition

This is where most businesses get flagged during audits. With the Code on Social Security provisions becoming active (effective late 2025), the definition of “Wages” for ESIC calculation has tightened.

The “50% Rule”:

If the Basic Pay + DA + Retaining Allowance is less than 50% of the total CTC (Cost to Company), the “excess” allowance is added back to the wages for ESIC calculation.

  • Impact: You cannot artificially lower ESIC liability by inflating “Special Allowances.” Ensure your payroll software is updated for this 2026 compliance.

Penalties for Delayed ESIC Payments

Missing the 15th of the month is expensive. The ESIC portal automatically calculates interest when you file late.

Duration of DelayDamages (Penalty) RateInterest Rate
Less than 2 months5% p.a.12% p.a.
2 to 4 months10% p.a.12% p.a.
4 to 6 months15% p.a.12% p.a.
6+ months25% p.a.12% p.a.

Note: Interest (12%) is mandatory and cannot be waived. Damages (5-25%) are discretionary but almost always levied by the Regional Director.

Frequently Asked Questions (FAQs)

1. Can I pay ESIC via Credit Card or UPI?

No. As of early 2026, the ESIC portal primarily accepts Net Banking through SBI Multi Option Payment System (MOPS). UPI or Credit Card options are generally not available for statutory corporate payments.

2. My transaction failed, but money was deducted. What should I do?

Do not make a second payment immediately. Use the “Online Challan Double Verification” link on the portal’s homepage. Enter your Employer Code and Challan Number. If it still shows “Pending/Failed” after 24 hours, contact your bank.

3. Is ESIC mandatory for a company with 5 employees?

Generally, ESIC applies to establishments with 10 or more employees (20 in some states like Maharashtra). However, voluntary registration is possible if you wish to provide medical benefits to your staff.

4. How do I revise a challan if I made a mistake?

Once payment is made, you cannot edit the challan. You must file a Supplementary Contribution for any shortfall. For excess payment, you will have to file a claim for a refund with your Regional ESIC office—a tedious process, so accuracy is key.

Conclusion: Stay Compliant, Avoid Notices

Making ESIC payments online is a streamlined process in 2026, but it demands precision. With the Labour Ministry’s digital data sharing, discrepancies between your GST turnover, Income Tax data, and ESIC payroll are easily detected.

Do not leave compliance to chance. Ensure your wage structures meet the 2026 norms and payments are cleared by the 15th.

Disclaimer: Tax laws and labour codes are subject to amendments. This guide is based on the regulations applicable as of January 2026. Always consult a professional before making strategic decisions.

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INTEGRATED ACCOUNTING & BUSINESS SERVICES PRIVATE LIMITED

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