How it is worked out
Employees' State Insurance gives workers medical care for themselves and their families, and cash benefits during sickness, maternity and employment injury. It applies in establishments with 10 or more people in notified areas, to employees whose gross wages are ₹21,000 a month or less.
Both sides contribute on gross wages — everything paid in cash for the month, overtime included, but not the employer's own PF or ESI, gratuity or retrenchment pay.
The rules used
- Coverage: gross wages up to ₹21,000 a month; up to ₹25,000 for a person with disability.
- Employee's share 0.75%; employer's share 3.25% (rates since 1 July 2019).
- No employee share when the average daily wage is ₹176 or less; the employer still pays 3.25%.
- Contributions are rounded up to the next rupee and paid by the 15th of the following month.
- Contribution periods run April–September and October–March. Someone covered at the start of a period stays covered until it ends, even after a raise above ₹21,000.
Assumptions. One employee, one month. The average daily wage is gross pay ÷ the days paid in the month.