Also Read: 5 Important FAQs Related to Gratuity

Since the presentation of the Union Budget 2022, a lot has been talked about the ESI contribution rate 2021-22. However, to be a part of this discussion, you should first know everything about ESIC contributions.

Here, we will talk about the same. We have picked five frequently asked questions and answered them in the simplest way possible. If you are an employer or HR manager, read on.


Let’s dive in and explore!

What does it mean?

The full form of ESIC is Employee State Insurance Corporation. It is particularly designed for working individuals in India. ESIC offers its members financial protection when they meet with any health issues.

What are its benefits?

There are many, but here are some of the top benefits of ESIC contribution:

• Medical benefits
• Disability benefits
• Maternity benefits
• Unemployment benefits
• And much more…

With the ESIC contribution scheme, employees can effortlessly face the worst situation. This is why it is one of the most recognized benefits in our country.

What is its eligibility?

Every company across India that comes under the ESI Act and all industries that hire more than ten working professionals and pay salaries below INR 21 K in a month is bound to do the ESIC registration and contribute towards the scheme.

How is it computed?

The rates of the ESI contribution are computed on the salaries paid. At present, the employee contribution is 0.75 percent of salaries paid/payable, whereas the employer contribution is 3.25 percent.

Is this scheme mandatory?

As we mentioned above, it is mandatory for employers who have 10+ people operating in a non-seasonal factory and employees who get below INR 20 K salary.

There you are.

Also Read: 5 Important FAQs Related to Gratuity

These are the five frequently asked questions and their answers you must know.

Hope you are left with no more questions.