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FINANCES: The scheme is primarily funded by contributions raised from insured employees and their employers in the implemented areas as a small but specified percentage of wages payable to such employees. The rate of comtribution were last revised by the Corporation from 1st January 1997 and are still in vogue. These rates of contributions are:

Employees Contribution - 1.75 percent of the wages.

Employers Contribution - 4.75 percent of the wages.

     Total - 6.50 percent of the wages.

Employees in receipt of an average daily wage of Rs. 40/- or less, are exempted from payment of their share of contribution (w.e.f. 8.4.2000) but are entitlted to all social security benefits under the Scheme.
The State Governments, as per provisions of the Act contribute 12.5 percent of expenditure on medical care or ESI beneficiaries in their respective States within the per capita ceiling. Any expenditure over and above this ceiling is borne entirely by the State Govts.

The contributions paid by employees and employers are deposited in a common pool known as the ESI Fund that is utilized for payment of cash benefits to the insured persons and their dependants, as well as, for providing medical facilities to the beneficiaries. The administrative and other expenses of Corporation are also met from this fund.

ADVANTAGES TO EMPLOYERS: Employers who come under the purview of the ESI Act - 1948, derive the following benefits from the Scheme:-

Employers are absolved of all their liabilities of providing medical facilities to employees and their dependants in kind or in the form of fixed cash allowance, reimbursement of actual expenses, lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of the employer.

Employers are exempted from the applicability of the:
(a) Maternity Benefit Act