Why is the employee’s ESI not being computed in Keka?

This usually occurs when ESI eligibility is updated to “Yes” mid-cycle. Keka does not automatically compute ESI in the middle of an ESI contribution cycle.

ESI in India follows fixed contribution cycles:

• April – September

• October – March

If an employee’s ESI was not deducted in the first payroll of the current cycle, even if their eligibility is updated later, the system won’t auto-compute ESI for the remaining months.

To ensure ESI is computed for the remainder of the contribution cycle:

1. A Global Admin or Payroll Admin must perform a manual override

2. Update the ESI settings manually for that employee during the current cycle

3. From the next contribution cycle, ESI deductions will apply automatically if eligibility is set to "Yes"

System Behavior:

• If ESI is deducted in the first month, the system continues it throughout the cycle even if eligibility is later changed to "No"

• If ESI is not deducted in the first month, it remains off unless manually overridden