ESI

CONTRIBUTION
Contribution is the amount payable to the Corporation by the principal employer in respect of an
employee and comprises the amount payable by the employee and the employer.
The scheme is primarily funded by contribution raised from insured employees and their
employers in the implemented areas as a small but specified percentage of wages payable to
such employees.
The rates of contribution as of now are:-
Employees’ contribution-1.75 percent of the wages
Employers’ contribution-4.75 percent of the wages
Total-6.50 percent of the wages
It is obligatory on the part of the employer to calculate and remit ESI Contribution comprising of
employers' share 4.75% plus employees' share of 1.75% which is payable on or before 21st of
the following month, to the month to which the salary relates. If the employee is drawing upto
Rs.50/- as daily average wage, he is exempt from the payment of his share of contribution. The
employer is however to pay employer's share of 4.75% of the salary received/receivable by the
employee.
The State Govt. bears one-eight share of expenditure on medical benefits with in the per capita
ceiling of Rs.1000/- per I.P. family per annum.

RECOVERY OF CONTRIBUTION:
In the first instance the Principal Employer is to pay employers' share of contribution in respect
of every employee whether employed directly or through immediate employer. The employees'
share may thereafter, be recovered by making deduction from their wages for the wage period
for which contribution is, however is payable. No such deduction may be made from any wages
other than those relating to the period in respect in which contribution is payable.
ESIC