Government Revises the Rates of ESI Contribution
Employees' State Insurance, also known as ESI is indeed one of the most noteworthy schemes run by the Central Government of India. Its objective is to cover all the risks of the employees who are employed in the organised sector. Today, the most economical and convenient way for an average employee to cover all social security risks is, to get an ESI registration.
The government give various benefits employees covered under ESI registration. For instance, families covered under NHPS scheme can access medical facilities via ESI Hospitals.
In this regard, the Government of India has recently reduced the rates of ESI Contribution via a draft notification.
#1. What is the current rate of ESI Contribution?
The Ministry of Labour and Employment has recently notified that the rates of ESI Contribution shall now be revised or reduced. Currently, Total 6.5% of the amount goes towards ESI Contribution. Out of this, 4.75% amount is contributed by the employer, and 1.75% is contributed by the employee.
#2. How much reduction has been made to ESI Contribution?
As the proposed reductions in respect of the ESI Contribution, the total ESI Contribution shall be reduced from 6.5% to 5%. Out if this,
- Employer Contribution shall be 4%
- Employee Contribution shall be 1%.
#3. When will the reduction in ESI Contribution rate be considered?
The proposal for a reduction in ESI Contribution shall be considered after 30 days of publication of the Gazette Notification.
These amendments shall now be called Employees' State Insurance (Central) (Amendment) Rules, 2019.
#4. Who is applicable for ESI registration?
All factories or business establishments having 10 or more employees have to obtain an ESI registration.
In case you require any sort of assistance regarding the ESI registration or GST return filing procedure, feel free to contact us at 8881-069-069.
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