ESI Scheme being contributory in nature, all the employees in the factories or establishments to which the Act applies shall be insured in a manner provided by the Act. The contribution payable to the Corporation in respect of an employee shall comprise of the employer’s contribution and employee’s contribution at a specified rate. The rates are revised from time to time. Currently, the employee’s contribution rate is 0.75% of the wages, and that of employers is 3.25% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a daily average wage up to Rs.176/- are exempted from payment of contribution. Employers will, however, contribute their own share in respect of these employees.
Collection of Contribution
An employer is liable to pay a contribution in respect of every employee and deduct employees contribution from wage bills and shall pay these contributions at the above-specified rates to the Corporation within 21 days of the calendar month's last day the contributions fall due. The Corporation has authorized designated branches of the State Bank of India and some other banks to receive the payments on its behalf.
Contribution Period and Benefit Period
There are two contribution periods: six months duration and two corresponding benefit periods, and six months duration.
Contribution period Corresponding Cash Benefit period
- 1st April to 30th September - 1st January of the following year to 30th June.
- 1st Oct to 31st March - 1st July to 31st December of the year following.