ESI Rate 2024-2025

Employee State Insurance (ESI) is managed by the Employee State Insurance Corporation (ESIC), which is an autonomous body working under the Ministry of Labour and Employment. The ESI scheme was started to provide medical, monetary and other benefits to Indian workers.

Any non-seasonal factory or company having more than 10 employees (in some states, it is 20 employees) who have a maximum salary of Rs. 21,000 has to mandatorily register itself with the ESIC and provide the ESI benefits to its employees.

Latest Updates

E.S.I.C. contribution rates are reduced W.E.F. 1st July 2019. The ESIC has fixed the contribution rate of the employees at 0.75% of their wages and the employer's contribution at 3.25% of the wages for FY 2024-25.

Rate of Contribution Under ESI

The ESIC is a social security system designed to provide socio-economic protection to workers, their immediate families, and dependents. The rates for the contribution are declared by the ESIC and are revised from time to time.

The contribution includes both the employe and employee contributions. The latest revision is w.e.f. 01.07.2019 and the rates are as follows:

• Employer’s Contribution – 3.25% of the wages paid/payable.
• Employee Contribution – 0.75% of the wages paid/payable.

If the employee’s daily average wage is up to Rs.176, they are exempted from making the contribution; however, the employer must make their share of the contribution.

The employers must deduct the employee contribution from the wages bill and must pay the employer and employee contribution at the rates specified above within 15 days of the end of the month in which contributions are made.

Designated branches of the State Bank of India and some other banks are authorised to receive the contribution on behalf of ESIC.

Period of Contribution

The following table illustrates the window period for contribution and for obtaining cash benefit:

ESIC Calculation

The ESI contribution of each employee varies based on the wages paid to the employee. The ESI contribution for each employee is as follows:

• Employer's Contribution - 3.25% of the employee's wages
• Employees Contribution - 0.75% of the employee's wages

Total ESI Contribution = Employer’s Contribution + Employees Contribution

For example: Mr. ‘A’ is working in a factory and getting a wages of Rs.20,000. 

The ESIC contribution will be as follows:

• Employer's Contribution – 3.25%*20,000 = 650
• Employees Contribution – 0.75%*20,000 = 150

Thus, the total ESI Contribution will be Rs.800 (650+150).  

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