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ESI Rate 2021

Updated on:  

08 min read

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 for providing 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.

Rate of Contribution Under ESI

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

The contribution includes both the employer and employee contribution. 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.137, 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 authorized 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:

ContributionCash Benefit
1st April to 30th Sept1st Jan of the following year to 30th June.
1st Oct to 31st March of the year following.1st July to 31st December.

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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