What is ESIC contribution?

Posted on 28th Aug 2018 | 1546 views

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ESI contribution stands for employee state insurance contribution an integral part of the ESIC scheme implemented by the government of India for employee social security and medical benefits.

ESI contribution

ESIC specified ESI percentage at which both employee and employer need to pay to the ESIC Corporation. ESI payment must be paid within 15 days of time from last day of the calendar in which transactions falls due. ESIC is a government entity established according to the provisions stipulated under ESI Act 1948.ESI raised employee salaryceiling from 15,000 to 21,000 RS.

Benefits provided by ESI

Medical benefits:ESI grant these benefits to the employee and his/ her family in event of any disease or accident

Sickness benefits: The employee must complete 78 days of consecutive working for sickness benefits

Enhanced sick benefits: The employee will earn 14 days of enhanced sick leave after completing 78 days of consecutive working

Extended sic benefits: As per the ESI Act, 1948 employee has to complete four periods each of 156 consecutive working days in two years.

Funeral expenses: 10,000 Rs granted to the employee or his/her family

Dependents benefits: In the event of employee’s death, the widow is granted with ESI dependents benefits until they are re-married if the employee is unmarried, the parents are considered as dependents

Maternity benefits: According to the ESI 1948, pregnant female employees are granted with 26 weeks of full paid leaves.

Employee state insurance scheme percentages

The contribution rate of the employee is 1.75%

The contribution rate of the employee is 4.75%

ESIC scheme has two ESI deduction periods with each of 6 months duration

First duration 1 April to 31 September

Second duration 1 October to 31 March

ESI also provides cash benefits period with each of 6 months duration and they are

1st January to 30 June

1st July to 31 September

ESI employer contribution is higher than the employee contribution and calculated as

ESI employer contribution= Gross salary * (4.75/100)

Here gross salary paid regarding the employee by the Establishment

ESI deduction rate for the employee = gross salary * (1.75/100)

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