Rate of contribution under the ESI Act reduced from 6.5% to 4%

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Update : Government of India: Rate of contribution under the ESI Act has been reduced from 6.5% to 4% (employers’ contribution reduced from 4.75% to 3.25% & employees’ contribution reduced from 1.75% to 0.75%). Reduced rates will be effective from 1st July 2019.

Click here to download the Gazette copy.

ESIC  today issued a Press note stating that the government has approved the reduced the rate of contribution.

However this reduced rate of contribution is to be notified through a final notification in the gazette. Only then it attains legal force and can be implemented.

Some media reports say that the reduced  rate of contribution will be  effective from 1st July 2019. But until the gazette notification is published in black and white, it should not be taken into consideration for implementation.

Hence let us wait for the publication of the gazette notification before taking a call on its implementation.

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