ESI Contribution Rates Reduced to 4 %

ESI stands for Employee State Insurance, this scheme is very important for workers of India.

It is a type of health insurance which is financed by the employee himself. This fund is governed by Employees’ State Insurance Corporation (ESIC) strictly according to rules and regulations under ESI Act 1948. ESIC is an autonomous body (Those bodies which are established independently and functions by its own law).

 

 

Eligibility

Employees getting daily average wage up to Rs.176/- are exempted from payment of contribution but employers will contribute their own share for these employees.

 
Changes applicable from

From 1st July 2019 onward both employers’ and employees’
contribution has been reduced.   Under ESI Act, 1948, all employees having salary up to Rs15,000 were liable to contribute towards ESI to increase the country’s formal workforce; the government had raised the wage ceiling in December 2016 to Rs 21,000 from Rs 15,000.

Employers’ Share 

The ESI Act is applicable for factorieswith 10 or more workers and it is also applicable to shops, hotels, restaurants, cinemas and road transport undertakings.

The employers’ share is reduced to 3.25% from 4.75% that is applicable from July 1st 2019.

 

 

Employees’ Share

The employees’ share is reduced to 0.75% from 1.75%. It will benefit 36 million employees as according Labour ministry data according to which 36 million workers were insured under the scheme in 2018-19, with a contribution of Rs 22,279 crore.                                   The ESI Act provides for medical, cash, maternity, disability and dependent benefits to the insured persons funded by the contributions made by the employers and the employees. The Employees’ State Insurance Corporation, under labour ministry, administers the scheme.


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Disclaimer: This Blog/Information/News Item/Press Release has been Posted/Reposted by Megasoft Solutions India.

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