Understanding Current Employee State Insurance (ESI) Contributions: What's the Real Impact?

What is the contribution of Employee State Insurance (ESI) at present?

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Hi Pavan,

The employee contribution is 1.75% on gross, and the employer contribution is 4.75% on gross. However, as per the new notification, employees covered under the ESI scheme are those whose gross salary is up to 15000, compared to the previous limit of 10000.

For more information, please visit the ESI website.

Regards,
Mohamed Rafiulla

Mohd. R is right. It has been updated to 15000, although it's not mentioned on the website. However, our PF officer informed us about it. The increase will be effective from this financial year.

Please find attached the Gazette amending the ESIC limit from 10000 to 15000.

Regards,
Shweta

Dear Mr. Pawan,

The limit of ESI has been revised w.e.f. 01/05/2010 from ₹10,000 to ₹15,000. Please see the order in the attached file.

Regards,
Ramesh Pandey

ESI contribution is at 1.75% towards employees' contribution and 4.75% towards employers' contribution. The wage limit is up to and including Rs. 15,000/-. In the case of physically handicapped persons with a disability of 40% or more, they are covered up to the wage limit of Rs. 25,000 per month. For those disabled persons, the employers' contribution at 4.75% is not required to be paid by the employer; instead, it will be paid by the Central Government. In other words, disabled persons with a disability of 40% or more are required to contribute only 1.75% up to the wage limit of Rs. 25,000.

Likewise, for lower-paid employees whose average daily wage is less than Rs. 70 per day, they are also not required to contribute their share of contribution at 1.75%, and only the employers' contribution at 4.75% is to be paid by the employer. However, they are entitled to all the benefits on par with the employees who are paying employees' contribution at 1.75%.