What is ESI?
Employees state insurance (ESI) is a self-financing social and healthcare insurance scheme for Indian workers. Employees’ State Insurance Corporation (ESIC) is a body under the “Ministry of Labour and Employment” act. Under the scheme, the employers and workers are required to contribute to a social insurance fund, which is to be utilized for granting benefits to them.
Employees’ State Insurance (ESI) is governed by the Employees State Insurance Act, 1948. It is a self-financed social security scheme designed to protect employees covered under the ESI act. Employees of an eligible organization are protected against financial distress arising out of sickness, disablement, and death due to employment injury.
|Minimum number of employees required for registration of establishment|
|Sl. no||State||Minimum employees to be registered|
|2||Jammu & Kashmir||20|
|32||Daman and Diu||20|
|33||Dadra and Nagar Haveli||20|
|34||Andaman and Nicobar||20|
What are the ESI contribution rates?
The ESI contribution payable to the ESI corporation comprises employer’s and employee’s contribution at specified rates. These rates are subject to revision from time to time.
Currently, the employer’s contribution is 3.25% of the wages, and that of employees is 0.75% of the wages payable or paid in every wage period. Usually, the wage period is a month. Such rates came into effect from the 1st of July 2019.
Employees earning up to Rs 176 on a daily average basis are exempted from payment of their contribution. But, the employer has to contribute their share for such employees.
How to setup ESI in SalaryBox?
- Open Settings option in SalaryBox
- Select Manage Salary Templates from Salary Settings Menu
- Select Create Template and name the Template (example: Salary Template for FY 2022)
- Under Employer Contribution you can find Employer ESI option from where you can select required option. (All available options as per the scheme are provided by default)
- Similarly under Employee Deductions you can find Employee ESI option from where you can select required option. (All available options as per the scheme are provided by default)
- After completing the entire template save the template.
- Select the employee on which you want to add the template.
- Go to Salary Payment Info
- Click on edit ESI, EPF an Allowance option
- Choose the desired template and click on update CTC
- Once updated, ESI will get calculated based on attendance of the month.