ESIC (Employee State Insurance) is a social security scheme designed to provide medical and financial benefits to employees working in India. It protects employees and their families during sickness, maternity, disability, or employment injury.
The scheme is managed by the Employees’ State Insurance Corporation under the Ministry of Labour and Employment.
Who is Eligible for ESIC?
· Establishments with 10 or more employees (in most states) must register under ESIC.
· Employees earning gross salary up to ₹21,000 per month are eligible.
· For employees with disability, the wage limit is ₹25,000.
Once covered, the employee continues to receive benefits during the contribution period even if salary increases beyond the limit (as per rules).
ESIC Contribution Rate (Current)
ESIC contribution is shared by employer and employee:
· Employer Contribution: 3.25% of gross wages
· Employee Contribution: 0.75% of gross wages
Total contribution = 4% of gross salary.
Example:
If an employee’s gross salary is ₹20,000:
· Employer contribution = ₹650
· Employee contribution = ₹150
· Total ESIC contribution = ₹800 per month
Benefits of ESIC
- Medical Benefit
Full medical care for:
· Employee
· Spouse
· Children
· Dependent parents
Treatment is available at ESIC hospitals and dispensaries. - Sickness Benefit
Cash compensation (around 70% of wages) during certified sickness for a maximum prescribed period. - Maternity Benefit
Paid maternity leave for eligible female employees, usually up to 26 weeks (as per rules). - Disablement Benefit
If an employee suffers employment injury:
· Temporary disablement benefit (periodic payments)
· Permanent disablement benefit (lifetime compensation) - Dependents Benefit
In case of death due to employment injury, dependents receive monthly pension. - Funeral Expenses
Fixed amount is provided to cover funeral costs.
How ESIC Works in Payroll?
Every month:
- Employer deducts 0.75% from employee salary.
- Employer adds 3.25% contribution.
- Total amount is deposited to ESIC portal.
- Employee receives ESIC insurance number and card.
Employers must file monthly contributions and half-yearly returns online.
How to Register for ESIC?
Employers must register on the ESIC portal and obtain:
· Employer Code Number
· Employee Insurance Numbers
After registration, employees can avail medical facilities from ESIC hospitals.