Contribution is the amount payable to the Corporation by the principal employer in respect of an employee and comprises the amount payable by the employee and the employer. The scheme is primarily funded by contribution raised from insured employees and their employers in the implemented areas as a small but specified percentage of wages payable to such employees.

The rates of contribution as of now are:-

    * Employees’ contribution-1.75 percent of the wages

    * Employers’ contribution-4.75 percent of the wages

    * Total-6.50 percent of the wages

It is obligatory on the part of the employer to calculate and remit ESI Contribution comprising of employers' share 4.75% plus employees' share of 1.75% which is payable on or before 21st of the following month, to the month to which the salary relates. If the employee is drawing upto Rs.100/- as daily average wage, he is exempt from the payment of his share of contribution. The employer is however to pay employer's share of 4.75% of the salary received/receivable by the employee.

The State Govt. bears one-eight share of expenditure on medical benefits within the per capita ceiling of Rs.1000/- per I.P. family per annum.

Recovery of Contribution

The first instance the Principal Employer is to pay employers' share of contribution in respect of every employee whether employed directly or through immediate employer. The employees' share may thereafter, be recovered by making deduction from their wages for the wage period for which contribution is, however is payable. No such deduction may be made from any wages other than those relating to the period in respect in which contribution is payable.