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ESI stands for Employee State Insurance managed by the Employee State Insurance Corporation which is governed by the ESI Act 1948. It is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India. It has started for the benefits of Indian workers. Under the scheme, there is huge benefits of medical and monetary through the employer.

Hope from the above words will have been clarified what is esi

There is some contribution ratio between employer and employee.

In this scheme, the employer needs to contribute and the amount of 4% of the total monthly salary of an employee and employee needs to contribute 0.75% of the amount

How to Calculate ESI:

Let’s understand the esi calculation with the example:

Gross Salary of an employee is INR 10,000,

Employee’s share of contribution would be: 0.75/100 * 10,000 = INR 75

And, the Employer’s share of contribution would be: 3.25/100 * 10,000 = 325

Hence, the total ESI contribution would be: 75 + 325 = INR 500