ESI Contribution Decreased

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They are to employ our deep knowledge of the law beyond the business, the transaction, the deal. To use the opportunities and skills we possess, to reflect on the culture we’re creating. Individually and collectively, these are our efforts to help shape the thinking of our future generations, and arm them with strategies for true, sustainable growth.

Jun 18, 2019

ESI Contribution Decreased

The Ministry of Labour and Employment has amended the Employees' State Insurance (Central) Rules, 1950 to lower contribution rates, for employers and employees, under the Employees' State Insurance Act, 1948. Effective July 01, 2019, employer contributions under the statute shall stand reduced from 4.75% to 3.25%, and employee contribution shall be reduced from 1.75% to 0.75%.

The Employees' State Insurance Act, 1948 is a social security legislation which provides, inter alia, for compulsory health insurance, medical benefits and hospital treatment and requires the employer and the employee to make monthly contributions to the Employees' State Insurance Corporation set up under the statute. The ESI Act is applicable to establishments having 20 or more employees (10 in some states) and earning up to INR 21,000 per month.

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