ESI contribution cycles, and why mid-cycle crossings are hard

ESI runs on two contribution periods a year: April to September, and October to March. Enrolment is decided at the start of a cycle and frozen for its duration.

So an employee earning ₹20,000 in April who is raised to ₹25,000 in August — above the ceiling — stays covered through September, and leaves the scheme in October.

Why implementations get it wrong

Because the obvious implementation asks "is this month's gross under the ceiling?" and answers correctly for eleven months and wrongly for the twelfth. The cycle has to be a stored fact about the employee, not a monthly recomputation.