Is ESI applicable to a clinic? PF and ESI for small clinics The thresholds, rates and portals under the Code on Social Security, as of October 2026.

Most single-doctor clinics in India do not have to register for ESI or provident fund. Under the Code on Social Security, 2020, ESI starts at ten persons employed, provident fund at twenty employees, and gratuity at ten employees. A clinic with a receptionist, an attendant and a nurse is well below all three. The thresholds count heads, not salaries, so a clinic that adds a second doctor on salary, a lab technician and evening staff should count again every time it hires.

Which law applies in 2026: the EPF and ESI Acts or the Code?

The Code. Notification S.O. 5319(E) of 21 November 2025 brought into force sections 1 to 14, sections 17 to 141, sections 144 to 163 and most of the repeal section of the Code on Social Security, 2020 from that day. The repeal section, 164(1), lists the Employees' State Insurance Act, 1948, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972 among the enactments repealed. The notification brought into force items 1 and 2 and items 4 to 9 of that list, leaving out item 3, the 1952 provident fund Act; the provident fund chapter of the Code has since been made operative through its own scheme and wage ceiling, described below.

Three further sets of instruments fill in the detail. The Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026) replaced the ESI (Central) Rules, 1950 and the Payment of Gratuity (Central) Rules, 1972, among others. The Employees' Provident Funds Scheme, 2026 (G.S.R. 525(E), 29 June 2026) was made under section 15(1)(a) of the Code "in supersession of the Employees' Provident Funds Scheme, 1952". And the provident fund wage ceiling was notified under section 2(89) of the Code, first at ₹15,000 (S.O. 2702(E), 29 May 2026) and then at ₹25,000 (S.O. 5109(E), 17 September 2026).

Where the Code says nothing new, section 164(2)(a) keeps earlier action alive: anything done under the repealed Acts, "including any rule, regulation, notification (including the notifications issued by the States)", continues. The Ministry of Labour's release of 21 November 2025 said the same in plain words: "During transition, the relevant provisions of the existing labour Acts and their respective rules, regulations, notifications, standards, schemes, etc. will continue to remain in force."

How many staff before ESI, PF or gratuity applies?

The First Schedule to the Code sets out who each chapter applies to. A clinic is an "establishment" because section 2(29) defines the word to include "a place where any industry, trade, business, manufacture or occupation is carried on".

Two points about counting. First, the ESI entry says "persons" and the provident fund entry says "employees"; neither excludes part-time staff, so count everyone on the clinic's payroll, including the evening receptionist. Second, the second proviso to section 2(26) says that for counting coverage under the provident fund and ESI chapters, employees "whose wages are more than the wage ceiling so notified by the Central Government, shall also be taken into account". A salaried junior doctor earning well above the ceiling still counts towards the ten or the twenty, even though no contribution is paid on that doctor.

What does a clinic with two to six staff actually have to do?

Under the Code, nothing has to be registered. The ESI threshold is ten, the provident fund threshold is twenty and the gratuity threshold is ten, and a typical OPD with a receptionist, an attendant, a nurse and a part-time cleaner is at four. That does not mean the clinic has no labour duties. Minimum wages, the time limit for paying wages and the state Shops Act still apply, and they apply from the first employee; those are covered in our posts on minimum wages for clinic staff and the shop and establishment licence.

1. Keep a staff list with joining dates and a monthly head count. Count everyone on the payroll, part-time included, and any salaried doctor.
2. When the count reaches eight, plan for ESI. At ten persons employed, the clinic is covered under Chapter IV, and section 1(8) keeps it covered even if two people leave next month.
3. At ten employees on any day in the last twelve months, gratuity applies. The liability is real only when someone leaves after five years, but the clock has started.
4. At twenty employees, register for provident fund.
5. If you want PF or ESI before the threshold, for example to keep a long-serving nurse, sections 1(5) and 1(7) let the employer and a majority of employees opt in. Rule 3 of the Social Security (Central) Rules, 2026 lets an employer who opted in apply to come out, with the majority's written agreement, but "no such application shall be made ... before five years of such coverage".

Is ESI applicable to my clinic, and what does it cost once it is?

If ten or more persons work at the clinic and ESIC runs the scheme in your district, yes. Contributions are paid on the wages of each employee within the ESI wage ceiling. Rule 19(1) of the Social Security (Central) Rules, 2026 fixes them per wage period as follows: "(a) employer's contribution, a sum (rounded to the next higher rupee) equal to three and one-fourth per cent. of the wages payable to an employee; and (b) employee's contribution, a sum (rounded to the next higher rupee) equal to three-fourth per cent. of the wages payable to an employee." Rule 19(2) waives the employer's share for up to three years for an employee who is a person with disability.

The ESI wage ceiling. ESIC's coverage page says: "The existing wage limit for coverage under the Act, effective from 01.01.2017, is Rs.21,000/- per month (Rs.25,000/- per month in the case of Persons with Disability)." We found no notification under the Code that changes this figure. The Ministry's S.O. 2351(E) of 8 May 2026 refers to "the wage ceiling as may be notified by the Central Government under clause (89) of section 2 of the Code for the purposes of becoming a member under Chapter IV", and says an employee whose wages cross the ceiling after a contribution period has begun "shall continue to be an employee for the remainder of that contribution period". The ₹25,000 notified in September 2026 is expressly "for the purposes of Chapter III", which is provident fund, not ESI.

Each new employee gets an insurance number when the employer registers them on the ESIC portal (rule 18), and the number becomes invalid if the employee's details are not updated on the declaration form within thirty days.

PF for clinic staff: the rate and the ₹25,000 ceiling

The Employees' Provident Funds Scheme, 2026 sets the employer's contribution "at the rate of twelve per cent of the wages payable to the employee", with the employee's contribution equal to it, and a ten per cent rate only for classes of establishments the Central Government notifies. Contributions are capped: "where the monthly wage of such a member exceeds the wage ceiling, the employer and employee's contribution shall be limited to the contribution payable on the wage ceiling". An employer may contribute on higher wages.

S.O. 5109(E) of 17 September 2026, in supersession of the ₹15,000 notification of 29 May 2026, "notifies rupees twenty-five thousand (₹25,000) per month as the wage ceiling for the purposes of Chapter III of the said Code, with effect from the date of publication of this notification in the Official Gazette". For a covered clinic that means a nurse on ₹22,000 a month, who was above the old ₹15,000 ceiling, is now within it.

Payment is monthly. The Scheme says "the employer shall, within fifteen days of the close of every month, remit the contributions to the Fund through electronic mode of payment authorised for such collection". S.O. 2357(E) of 8 May 2026 adds that "for any contribution or any other amount payable under the Code, the employer shall be liable to pay simple interest at the rate of twelve percent per annum from the date on which any amount has become due under the Code till the date of its actual payment".

A worked example for a clinic that crosses ten

Take, as an illustration, a two-doctor clinic in a district where ESIC runs the scheme. It employs a salaried consultant, three nurses, two receptionists, two attendants, a pharmacist and a cleaner: ten persons. The clinic is covered by ESI from the day the tenth person joins, but not by provident fund (under twenty) and it is covered by gratuity (ten on a day in the last twelve months). The consultant's salary is above the ESI ceiling, so no ESI is paid on it, but the consultant still counts towards the ten. A receptionist on ₹18,000 a month costs the clinic ₹585 a month in ESI (3.25%) and has ₹135 deducted (0.75%), each rounded up to the next rupee as rule 19 requires.

Where does a clinic register?

On the Ministry's Shram Suvidha Portal. Rule 5(1)(a) of the Social Security (Central) Rules, 2026 says every employer seeking registration for an establishment not already registered "shall apply electronically in Form-I of the Occupational Safety, Health and Working Conditions (Central) Rules, 2026, on the Shram Suvidha Portal", which is "the common form for registration under these rules". The certificate is issued electronically in Form-III "not later than seven days from the date of submission of complete application, failing which such establishment shall be deemed to have been registered". Changes in particulars have to be updated within thirty days (rule 5(6)).

1. Collect the clinic's PAN (rule 5(1)(d) says it may be verified online), the owner's identity and address proof, the premises address and the staff list with dates of joining and wages.
2. File Form-I on the Shram Suvidha Portal and keep the registration number; rule 5(5) asks the employer to quote it "on all documents prepared or submitted by him in connection with the Code".
3. Register each employee on the ESIC portal for an insurance number, or on the EPFO portal for a UAN, as the case may be.
4. Deduct the employee's share from wages before paying them, and pay both shares by the monthly due date. Keep the challans in the month's file for the CA.

Gratuity: when does a clinic owe it?

Gratuity applies to a shop or establishment with ten or more employees on any day of the preceding twelve months. Under section 53(1), it is payable on termination of employment "after he has rendered continuous service for not less than five years", on superannuation, retirement, resignation, death or disablement, or on the end of a fixed-term contract; five years are not needed where termination is due to death, disablement or expiry of fixed-term employment. Section 53(2) fixes the amount at "fifteen days' wages" for every completed year of service or part in excess of six months. For a clinic of ten that has a receptionist who has been with it eight years, that is a sum to provide for, not a surprise to meet on the last day.

Common mistakes small clinics make