ESI rate has been reduced from 6.5% to 4%

Hello customers.

The Government of India has decided to reduce the rate of ESI from 6.5% to 4% in which the employee's contribution has been reduced from 1.75% to 0.75% and the employer's contribution from 4.75% to 3.25%.

ESI Contribution	Old ESI Rate	New ESI Rate (Effective from 1 July 2019)
Employer's Contribution	4.75%	3.25%
Employee's Contribution	1.75%	0.75%

This new rate is coming into effect from July 1, 2019. That means, from 01 July 2019, employers and employees will pay a lower ESI and will still continue to get the same benefits.

You don’t have to worry about updating this rate in Zoho Payroll. We will update it by 1 July 2019, and the employer's and employee's ESI contribution (based on the new rate) will be calculated automatically when you run payroll.

You can read more from the official announcement by the Press Information Bureau.

Cheers,

Alen J Abraham

The Zoho Payroll Team