Legal Means VAKILKARO
Employees are the most important resources in any organization and to take the utmost care is the responsibility of the employer. The government has introduced various schemes for the benefit of the employees, one such scheme is Employee State Insurance i.e., ESI.
ESI provides various types of medical benefits to the employees during and after employment. In ESI, the employer contributes 3.25% of the Salary, and the employee contributes 0.75% of the Salary. This contribution is paid to the government through the monthly challans and the employee becomes eligible for the benefits under the ESI.
The time required for the submission of the documents is 5-10 days.
The employer is required to register under ESI Act when organisation has more than 10 employees and the salary of employees does not exceed Rs. 21,000. It means that ESI will be contributed for only for the employees having salary up to Rs. 21,000.
The Registration is valid throughout the life of the organization.ESICode is 17-digit code.
For the following are the contribution rates:
• Employer contributes 3.25% of the salary.
• Employee contributes 0.75% of the salary.
Earlier the contribution rates were as follows: • Employer contributed 4.75% of the salary.
• Employee contributed1.75% of the salary.
The employee whose salary is less than Rs. 176 per day is exempted for his contribution.
The following entities are covered under ESI Act:
• Private educational institutions.
• Newspaper establishments, etc.
The employer needs to do the following compliances:
• ESI monthly returns and challans.
• Register of attendance to be maintained.
• Register of Accident.
• Register of Wages.
The ESI registration is required for each and every unit of an organisation having more than 10 employees and having salary up to Rs. 21,000.
ESI registration is not applicable where all the employees in the organisation are withdrawing salary more than 21,000.
The employer must apply for registration of ESI within 15 days of its applicability to the organisation.
The ESI is deposited monthly. The due date for depositing the ESI challan is 15 days from the end of the month to which the contribution relates. Late depositing of ESI challans attract interest rate of 12% p.a. each day of default and disallowance of ESI contribution while computing income tax.
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