How to enable/disable ESI for a pay group

What is ESI 

ESI (Employee State Insurance) is a self-financing social security scheme that provides protection to employees against sickness, maternity, and employment-related injuries.

Under the ESIC Act, both employer and employee contribute a fixed percentage of wages monthly.
ESI applies to employees earning less than ₹21,000 per month, with contribution cycles running from:

• April 1 → September 30

• October 1 → March 31

In most states, the coverage threshold for ESI remains 20 employees.

When to Disable ESI

If, during a contribution cycle, an employee’s salary exceeds ₹21,000/month, ESI should be disabled for that employee or pay group.
This ensures the system stops calculating unnecessary ESI contributions.

Steps to Enable or Disable ESI for a Pay Group

1. Go to Payroll → Settings → Pay Groups.

2. Select the relevant Pay Group.

3. Click the Configure icon under Actions.

   

4. Navigate to Contributions.

5. Click on the three dots (⋮) and select Update ESI Settings.

   

6. In the ESI Settings tab, toggle on/off to enable or disable ESI.

7. Click Update.

8. If you disable ESI, a confirmation dialog will appear — select Yes, Disable ESI.

9. Once disabled, the ESI status will show as Disabled in the Contributions section.