Reduction in ESI Contribution Rate

The government has reduced the employer’s and employee’s ESI contribution rate under the Employees’ State Insurance Act. This move will not only increase the take-home salary of workers, but also reduce the financial load on the employers.

Starting July 1, both employer’s and employee’s contribution under the Employees’ State Insurance (ESI) Act, which gives insured workers medical benefits among other facilities, would be reduced, the Centre said on Thursday.

New ESI Contribution Rate

The total contribution towards ESI was reduced from 6.5% of an employee’s wages to 4%, with the employer’s share cut to 3.25%, from 4.75%, and the employee’s contribution lowered to 0.75% of wages, from 1.75%, the government announced.

To learn more, you can view the draft copy of ESI Gazette Notification.

Related Blog : ESI contributions to be paid till 15th of every month