What happens if you pay ESI late?

When ESI is due

ESI for a month is due by the 15th of the next month. Pay after that date and it is late.

Interest

Interest is 12% a year on the unpaid amount. It is counted for each day, from the due date until the day you pay. It is charged on every late payment.

Damages

Damages are a fine on top of the interest. ESIC decides whether to charge them. The yearly rate goes up the longer you are late: 5% (less than 2 months), 10% (2 months or more, but less than 4), 15% (4 months or more, but less than 6), 25% (6 months or more). Damages can't be more than the unpaid amount.

Example: ₹50,000 paid 66 days late

You owe ₹50,000 of ESI. You pay 66 days late. That is 2 months or more, but less than 4, so damages are 10% a year.

• Interest: ₹1,085 (12% a year for 66 days)
• Damages: ₹904 (10% a year for 66 days)
• Extra to pay: ₹1,989
• Total you pay: ₹51,989

These are estimates. ESIC decides the final amount.

If an inspection finds it

An inspection can find late payments. You may then have to pay the unpaid amount, interest and damages together. Read what happens in an ESI inspection.

How to avoid it

• Pay your ESI by the 15th every month.
• Check the amount with our free ESI contribution calculator before you pay.
• Each month, check that the ESI you paid matches that month's salaries. Then you find a missed payment in days, not months.

Not sure ESI applies to you? Read ESI: who must register.