C. Deduction Components | 1. ESI Employees
ESI (Employees’ State Insurance) is a mandatory statutory medical benefit scheme governed by the ESIC (Employees' State Insurance Corporation) under the Ministry of Labour & Employment, and managed by respective State Governments.
📋 Applicability:
- Mandatory for employees with gross monthly salary ≤ ₹21,000
- Not applicable if gross salary exceeds ₹21,000
💰 ESI Contribution Rate:
- Employee Contribution: 0.75% of gross salary
- Employer Contribution: 3.25% of gross salary
🔍 Example Calculation:
If the gross salary is ₹21,000:
- Employee’s ESI: ₹21,000 × 0.75% = ₹157.50
- Employer’s ESI: ₹21,000 × 3.25% = ₹682.50
If gross salary exceeds ₹21,000, then both employee and employer contributions are NIL.
🏥 Purpose:
ESI provides medical, sickness, maternity, disability, and dependent benefits to employees and their families through ESIC-authorized hospitals and clinics. It is a crucial part of India's social security system for lower-income salaried workers.
✅ Summary:
- Applies to employees earning ≤ ₹21,000/month (gross)
- Employee share: 0.75% of gross salary
- Employer share: 3.25% of gross salary
- Not applicable if salary exceeds ₹21,000
- State-managed health benefit under ESIC
Please do not enter any spam link in comment box. Thank you!