The Provident Fund (PF) contribution is 12% of PF Wages from both employee and employer. The Employees State Insurance Corporation (ESIC), which administers the ESI Act, had in February recommended decreasing the total rate of contribution of workers towards the insurance scheme from 6.5 per cent to 5 per cent. The reduced rates are effective 1 July 2019. Employer’s and Employee’s contribution ESIC limit increased to Rs 21000 circular was released in the year 2016 but the increased ESI contribution salary limit is effective from 1 Jan 2017. The Reduced ESI (Employees State Insurance) Contribution Rate … Aug 30 2012 . 407. Click here to download the Gazette copy. Employees’ State Insurance Corporation (“ESIC”) is a statutory corporate body set up under the ESI Act 1948, which is responsible for the administration of ESI Scheme. 94 and company ESIC contribution will be @ 3.25% i.e Rs. The employer’s contribution has been reduced from 4.75 percent to 4 percent of wages, and employee contribution from 1.75 percent to 1 … The government, last week, approved the reduction in the rate of the contributions made by employers and employees to the Employees’ State Insurance (ESI) Scheme.This reduction will benefit all the employees and employers covered under the ESI Scheme. The Government of India has reduced the rate of ESIC contribution under the Employees’ State Insurance Act (‘ESI Act’) from 6.5 percent of the total wages to 4% of the total wages. Minimum 20 eligible employees are required to get registered under ESIC. PF / ESIC rate of deduction for both Employee & Employer contribution PF / ESIC rate chart. contribution rates are reduced W.E.F. The Ministry of Labour and Employment of the Government of India has issued a gazette notification int his regard. E.S.I.C. However, the labour and employment ministry went a step ahead to decrease the contribution rate to 4 per cent. In Simple Words we may say that Total ESI Contribution Rate will become 4 % in place of 6%. latest update: E.S.I.C. The Government of India has taken a historic decision to reduce the rate ofcontribution under the ESI Act from 6.5% to 4%(employers’ contribution beingreduced from 4.75% to 3.25% and employees’ contribution beingreducedfrom 1.75% to 0.75%).Reduced rates will be effective from 01.07.2019.Thiswould benefit 3.6 crore employees and 12.85 lakhemployers. Benefits in brief include medical, cash, maternity, disability and dependent benefits. company and employee, then both the contributions will deduct from your salary otherwise only employee contribution will deduct from your salary. Under the Revised ESI Contribution Rate now employee has to pay 0.75% instead of 1.75% and Employers contribution will become 3.25% instead of 4.25 %. 1st July 2019! It is calculated on the basis of gross salary/wages/pay per month and the maximum limit is up to ₹ 21,000/- per month (earlier it was ₹ 15,000 per month). ESIC Contribution Calculation as per Reduced Contribution Rates For example, if an employee’s monthly gross salary is Rs.17000 then ESIC will be calculated in the following manner: Employee Contribution 0.75% = 17000 x 0.75% = Rs.127.5 There are two ESIC contributions, employee ESIC contribution will be @0.75% i.e. The contribution rate cut is expected to help firms save around Rs 5,000 crore per year, benefitting 3.6 crore employees and 12.85 lakh employers. ESIC Rates Revised to 4% Rs. The new ESIC rate would be effective from July 1, 2019, the Ministry of Labour & Employment said on Thursday. Furthermore, these contributions come from employees and employers. As mentioned earlier, the Employees’ State Insurance Corporation, under labour ministry, administers the scheme. 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