Penalties ESIC Act Section 85B — Damages for Delayed ESIC Contribution
ESIC Act Section 85B — Damages for Delayed ESIC Contribution
ESIC Act 1948 — 85B
Damages on delayed ESIC contribution: 5% p.a. (delay < 2 months), 10% p.a. (2–4 months), 15% p.a. (4–6 months), 25% p.a. (over 6 months) — plus 12% p.a. simple interest under s.39(5)(a).
The Penalty
5% → 25% p.a. slab-based damages + 12% p.a. interest
- Cap
- Damages cannot exceed the amount of contribution defaulted (s.85B(1) proviso)
- Calculation base
- Contribution amount (employer 3.25% + employee 0.75%) not paid
- Period
- Damages one-time on the default; interest until deposit.
When does this apply?
ESIC contribution not paid by the 15th of the following month.
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹02 delayed months across the authored slabs
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| ESIC ₹50,000 delayed 3 months | 10% × ₹50,000 × 3/12 = ₹1,250 damages + interest | ₹1,250 |
| ESIC ₹1,00,000 delayed 7 months | 25% × ₹1,00,000 × 7/12 = ₹14,583 damages + interest | ₹14,583 |
How it is levied
ESIC Regional Office adjudicates and passes damages order. Reduction / waiver possible for genuine hardship.
⚠ VERIFY
ESIC rate slabs are prescribed by regulation — confirm current Regulation 31A slab schedule; historically 5/10/15/25 has been the pattern.