What is ESI

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glossary

Employee’s state insurance scheme is self-financing social security and health insurance scheme for Indian workers regulated by the Indian government. ESIC scheme comes under the Indian ESI act of 1948 whose main objective was to protect the employees in their trying times such as disability, illness, maternity, employment injury and so on. If the employee has ESIC scheme they can claim that insurance money in medical care for their family.

ESI scheme is applicable in all forms of working establishments such as corporate company, factories, entertainment industry, medical care, food business etc. If a company has more than 10 employees then this scheme is applicable in that organisation. Employees whose monthly income is Rs. 21,000 or less can avail the benefits of this scheme.

The ESI is calculated on employee’s gross salary i.e. income earned before any taxes, benefits or deductions such as gratuity an all.

The money contributed for ESI comes from employee and employers pockets. An employee contributes 1.75% of their salary/gross pay while an employer contributes 4.75% of employees salary/gross pay. The total contribution made is 6.50% of employee’s salary.

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Sukriti Saini

Sukriti Saini works as a content marketing strategist at HROne. She has done Bachelors in Journalism from Delhi University and carries several years of experience in content development. HR trends, Productivity, Performance and topics related to Employee Engagement garner most of her writing interest here. During leisure, she loves to write and talk about fashion, food & life.

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