Rate of Employee’s Contribution

• The employee’s share in ESIC is 0.75% of their gross monthly wages.
  
• This contribution is deducted directly from the employee’s salary.
  
• It applies only to employees earning up to the prescribed wage limit.
  
• The rate is fixed and uniform for all qualifying employees.
  
• Employees earning above the limit are not subject to this deduction.
  

Applicability Criteria for Employees

• Employees earning up to ₹21,000 per month are covered under ESIC.
  
• For employees with disabilities, the wage limit is ₹25,000 per month.
  
• The contribution becomes applicable from the date of joining.
  
• Employees above the limit are excluded from contribution but not retrospectively.
  
• Coverage continues through the contribution period even after wage increase.
  

Exemption for Low-Earning Workers

• Employees earning less than ₹176 per day are exempt from their share.
  
• In such cases, the employer must still contribute the full 3.25%.
  
• The exemption supports very low-income workers from wage deductions.
  
• Employers must classify and report exempt employees accurately.
  
• Exemption status should be updated if daily wage crosses the threshold.
  

Role of Employer in Deduction

• The employer is responsible for deducting the employee’s share.
  
• The deduction is made monthly along with payroll processing.
  
• It must be deposited along with the employer’s share by the 15th.
  
• Failure to deduct or deposit may lead to legal and financial penalties.
  
• All deductions must be reflected in the salary slips and records.
  

Benefits of Employee Contribution

• Contributing employees are eligible for medical and cash benefits.
  
• These include sickness, maternity, injury, and dependent coverage.
  
• Only regular and timely contributions ensure uninterrupted benefits.
  
• The employee’s share helps fund the ESIC’s welfare programs.
  
• Records of contributions are linked to the employee’s ESIC number.