ESI (Employee State Insurance)

What is ESI?

Employees’ State Insurance (ESI) is a social security and health insurance scheme governed by the Employees’ State Insurance Act, 1948, managed by the Employees’ State Insurance Corporation (ESIC). It provides medical, financial, and disability benefits to employees earning below a specified wage threshold and their dependents.

Key Features:

• Eligibility: Employees with a gross salary ≤ ₹21,000 per month (₹25,000 for persons with disabilities).
• Contribution Rate (as of FY 2025):
• Employer: 3.25% of gross salary.
• Employee: 0.75% of gross salary.
• Coverage: Includes sickness benefits, maternity, disability, dependents’ pension, and medical care.
• ESI Number: A unique 17-digit number allotted to each insured person.
• Compliance: Mandatory for establishments employing 10 or more persons (varies by state).

Example

If Meena earns ₹18,000 monthly, her ESI contribution = ₹135 (0.75%), and the employer contributes ₹585 (3.25%). Both amounts are deposited to ESIC.

Why ESI Matters:

It ensures affordable healthcare and financial protection for employees, safeguarding them during illness, maternity, or injury.