Facts You Need To Know About ESIC

Terms like PF and ESIC are confusing yet important for an employee to understand. As these schemes are for the employees benefits and can serve him with monetary support whenever the employee is in need . One such term is ESIC,employee state insurance corporation established as per the employees state insurance act 1948. This act aimed at providing monetary benefits to employees for medical reasons such as maternity, sickness or disability. This is a self financing monetary scheme primarily built out of contribution made by both the employee and employer. 

This scheme covers the medical expenses of the employee under the ctc amount of 21,000.This scheme covers the medical expenses of the employee and their families. The contribution is made by both the employee and the employer which amounts the total rate of contribution to 4%,where the amount deducted from the employee is 0.75% and from the employer is 3.25% of the total amount.

The ESI calculator works with the deduction made from both the employee and the employer and is calculated which includes the basic salary including benefits provided by the organization.The bonus amount is not included in the calculation.

Here are some the eligibility criteria of ESIC:

• The units covered under Factory Act and shops and Establishment  Act are considered to be eligible for ESIC.

• The upper limit of ESIC varies in different states , for example in Gujrat and Punjab ESIC upper limit depends on the number of employees working in the organization.

• The ESIC scheme is applicable in specific areas as the ESIC scheme is not applicable in all the states of the country. 

• For ESI calculator , the amount considered includes salary which comprises basic pay, dearness allowance, house rent allowance, city compensatory allowance, etc.

• The ESI calculations however doesn’t include bonuses,retrenchment compensations, encashments of leaves and gratuity.

• The ESI amount is to be deposited within the last 15 days of the month, failing which could result in hefty penalty and in some cases might also result in imprisonment.

• .The ESI scheme as a period of contribution which is continued even if the salary of the employee exceeds the upper limit.There are two phases of contribution which covers the duration of 6 months for each period. At the end of the contribution period if the employee exceeds the upper limit no deduction will be made and the employee will still be covered for that financial year under the scheme.