ESI Rate 2024

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 2023-24.

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).  

Frequently Asked Questions

Who fixes the rate of contribution for the ESI scheme?

The Government of India fixes the contribution rate for the ESI scheme. The rates are revised from time to time. Currently, the government reduced the rate of contribution in June 2019, effective from 1st June 2019. At present, the employee’s contribution rate (w.e.f. 1.07.2019) is 0.75 % of the wages, and that of the employer is 3.25% of the wages paid/payable in respect of the employees in every wage period. 

Is an employee still covered under the ESI scheme if his/her wages exceed Rs.21,000 in a month?

If the wage of an employee exceeds the wage limit of Rs.21,000 after April or October for the respective contribution periods, then the employee continues to be an employee till the end of that contribution period. Hence, the contribution is to be deducted and paid on the total wages earned.

Where can I get the details of the current ESI rate of contribution?

You can view the current ESI rate of contribution on the ESIC website. The government publishes the updated rate of contributions to be made by the employee and the employer on the website.

Can I withdraw my ESIC amount?

ESI scheme is an insurance scheme in which the employees and employers provide the premiums in form of contributions. You can avail of the ESI fund amount for medical use or other benefits provided under the ESI scheme only, and it cannot be withdrawn for personal use. The ESIC funds can only be claimed against various ESIC benefits provided under the ESI scheme.

What are the various benefits provided under the ESI scheme?

The ESI scheme provides the following benefits to employees:

• Medical benefit
• Sickness benefit
• Disablement benefit – Temporary disablement benefit and permanent disablement benefit
• Dependent benefit
• Maternity Benefit
• Confinement expenses
• Funeral Expense
• Unemployment allowance

What is an ESI card?

An ESIC or ESI card, also known as a pehchan card, is a magnetic card given to each insured person. This card is required to avail of various ESIC benefits, including hospital payments.

How to download an ESIC pehchan card?

The employer needs to download the counterfoil of the ESIC pehchan card from the ESIC portal and give it to the employees. The employees need to attest their photographs and signature on the counterfoil of the ESIC pehchan card and submit it to the nearest ESIC office. Employees must take their dependents to the ESIC office to capture their fingerprints. Once the ESIC office captures the fingerprints, it will send two ESI cards to the employees through a courier. 

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

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