BooksIQESI applies to employees drawing gross wages up to ₹21,000/month (₹25,000 for persons with disability). The EMPLOYEE contributes 0.75% and the EMPLOYER 3.25% of gross wages (reduced from 1.75% / 4.75% w.e.f. 1-Jul-2019). Establishments with 10+ employees. Deposit by the 15th of the next month.
Key points
- COVERAGE: the ESI Act applies to non-seasonal establishments employing 10 OR MORE persons (20+ in a few states) and covers EMPLOYEES whose GROSS monthly wages do not exceed ₹21,000 (₹25,000 for an employee with a disability).
- CONTRIBUTION RATES (w.e.f. 1 July 2019, reduced from 1.75%/4.75%): EMPLOYEE 0.75% of gross wages, EMPLOYER 3.25% of gross wages — total 4%.
- An employee earning up to the ₹176/day wage floor is exempt from the employee share (employer still pays).
- Contribution periods are Apr-Sep and Oct-Mar;
- once covered in a period, contribution continues to its end even if wages cross the ceiling mid-period.
- PAYMENT is due by the 15TH of the following month via the ESIC portal.
- Benefits include medical, sickness, maternity, disablement and dependants' benefit.
- Late deposit attracts interest (12% p.a.) and damages, and is DISALLOWED for income-tax under §36(1)(va) if not paid by the ESI due date.
Reference: ESI Act 1948 read with ESI (Central) Rules
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