Rate of Employer’s Contribution

• The employer’s share in ESIC is 3.25% of the employee’s gross monthly wages.
  
• This contribution is fixed and applies to all eligible employees.
  
• It is calculated based on wages including allowances as defined by the Act.
  
• The employer must contribute this amount regardless of employee contribution.
  
• This rate is applicable as long as the employee is within the wage ceiling.
  

Applicability of the Employer’s Share

• The employer must contribute for all employees earning up to ₹21,000 per month.
  
• For employees with disabilities, the limit is ₹25,000 per month.
  
• The employer’s contribution is mandatory even if the employee is exempt.
  
• This share is not waived in any circumstance where ESIC coverage applies.
  
• Contributions are required from the date of employee joining.
  

Responsibility for Payment

• The employer is responsible for deducting and depositing both shares.
  
• The employer remits contributions to ESIC on or before the 15th of each month.
  
• Failure to deposit the employer’s share attracts penalties and interest.
  
• Contributions must be submitted along with monthly return filing.
  
• The employer must maintain records of all payment details.
  

Calculation and Payroll Compliance

• The employer’s share is calculated monthly based on actual earned wages.
  
• Allowances such as dearness, overtime, and attendance may be included.
  
• Payroll systems must be configured to compute accurate deductions.
  
• A uniform percentage is applied to all qualifying employees.
  
• Contributions are rounded off to the nearest rupee as per ESIC norms.
  

Importance of Timely Contribution

• Timely payment of the employer’s share ensures employee benefit eligibility.
  
• It protects the establishment from legal notices and inspections.
  
• Accurate employer contributions are crucial during audits and compliance reviews.
  
• Employees can access medical and cash benefits only if contributions are up to date.
  
• Delays can result in liabilities for back-payments with interest and damages.