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asonvarsha Started The Discussion:

Dear All,

My query is regarding the ESI amount deduction from an employees salary.

If an employee whose salary is Rs.9500/-pm and we increase his salary to 11000/-pm then at what amount should we deduct the ESI on Rs. 10000(fixed amount) or Rs 11000/-. Please revert on urgent basis.

Thank you

Anu

anandamh - Member Since: Jun 2009
ESI ceiling limit is Rs.10,000 if the salary exceeds then we should stop ESI deduction. :icon1:

malikjs - Member Since: Nov 2007
dear
if you have increased alary to 11000 than inbetween you can not stop deduction and you are required to deduct ESI on 11000.
you can stop deduction in the salary of april and october every year.our return cycle is oct to marc and apr to september.
after completion of this cycle you can stop deduction but inbetween you can not.
regards
j s malik


Quote:
Originally Posted by asonvarsha View Post
Dear All,

My query is regarding the ESI amount deduction from an employees salary.

If an employee whose salary is Rs.9500/-pm and we increase his salary to 11000/-pm then at what amount should we deduct the ESI on Rs. 10000(fixed amount) or Rs 11000/-. Please revert on urgent basis.

Thank you

Anu

vg.saji - Member Since: Sep 2008
I 'm working in an BPO organization, and i know labour welfare fund is being deducted for some states half year (i.e) Mumbai, Delhi Kerala, Kolkotta etc, monthly and yearly. Could you please help me with regard to half yearly slabs who are eligible for deductions, and if you could provide me the notifications as such.

rajeshkhattar - Member Since: Jun 2009
dear anu

ESI contribution periods are (oct to mar) & (apr to sep)

if salary is increased between the contribution period then the deduction will be made on full salary i.e 11000 upto the completion of contribution period and after the completion of contribution period there will be no deduction of ESI contribution

thanks
regards

RAJESHKHATTAR
(ESI & PF Consultant)
Muskan Consultancy Services
email:

MANJUNATH G.K. - Member Since: Apr 2009
Dear Anu,

I do agree with Mr. Rajeshkhattar. What is said is correct. The Contribution is between from April to Sept, and from October to March. When an employee coming under ESI ceiling in between the contribution, though he crosses the ceiling of Rs. 10,000/- you have to pay on the gross amount except washing allowance, if any. You can stop deduction either in the month of October or April. You have to send a report to the ESI Local office about cessation of the member from the scheme.

Thanking you,
G.K.Manjunath

winword2003 - Member Since: Oct 2005
Hi,

We all know that, employees who are drawing more than Rs.10000/- salary per month other than conveyance (regular payment) need not to pay ESI contribution. Those who are earning less than Rs.10000/- will be covered under ESI.

Suppose, an employee is drawing gross salary less than Rs.10000/- per month (regular payment as per appointment order) in the beginning of the contributions period (from April 2009 to September 2009) and earning Variable Incentive, Production Bonus, Over time, Shift allowance separately in the same month. ESI contribution (1.75%) must be deducted from his total earnings.

In the middle of the contribution period ie., between April 2009 and September 2009, he got an increment and fetched to Rs.11200/- gross as regular payment per month apart from earnings like Variable Incentive, Production Bonus, Over time, Shift allowance.

Though, he is drawing more than Rs.10000/- per month (regular payment after increment), employer must deduct ESI contributions on total gross + earnings like Variable Incentive, Production Bonus, Over time, Shift allowance till the end of contribution period. Deduction can be stopped from next contribution period onwards..

Example one employee gross and other earning, ESI deductions per month as follow:

Month Basic HRA FI Other Allowance Gross VI PB OT SHA TG ESI Cont. (1.75%)
Contribution period from April 2009 to September 2009
April 5000 1500 500 1000 8000 0 1000 900 150 10050 176
May 5000 1500 500 1250 8250 0 1000 400 150 9800 172
June 7000 2100 0 2100 11200 673 600 600 200 13273 233
July 7000 2100 0 2100 11200 591 300 600 175 12866 226
Aug 7000 2100 0 2100 11200 306 200 400 100 12206 214
Sep 7000 2100 0 2100 11200 579 200 300 175 12454 218
Contribution period from October 2009 to March 2010
Oct 7000 2000 500 2350 11850 0 600 400 150 13000 0
Nov 7000 2000 500 2350 11850 0 600 400 150 13000 0
Dec 7000 2000 500 2350 11850 0 600 600 200 13250 0
Jan 7000 2000 500 2300 11800 0 200 400 100 12500 0
Feb 7000 2000 500 2300 11800 0 200 300 175 12475 0
Mar 7000 2000 500 2350 11850 0 600 400 150 13000 0



Apart from the above, ESI contributions must be made from employee’s payment of EL encashment by applying above condition. The ESI contributions and payment details of EL encashment should be submitted to the ESIC Corporation along with the half – yearly returns (form 6) submission.

Over and above one paisa in calculation of contributions should be rounded off to a rupee.



Acronyms

VI: Variable incentive; It is variable in nature, hence, not considered as salary component
PB: Production Bonus; One month you may get. Other month you may not get. Not in regular nature. Hence, not Considered as salary component
OT: Over Time; as same as above
SHA: Shift Allowance; Generally, those who are attending night shift will be paid shift allowance. It is also not
regular monthly payment. Hence, not considered as salary component


Attached FilesProvided by community member winword2003. Join us to learn and grow with your peers.
File Type: doc ESI deduction.doc (71.5 KB, 2869 views)
esicpfconsultants - Member Since: Aug 2009
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or visit us at www.esicpfconsultants.com
We are in this field since 28 years, with more than 100 clients in mumbai and pune. We are the leading service providers.
So go for the Best and dont be confused!

winword2003 - Member Since: Oct 2005
Quote:
Originally Posted by asonvarsha View Post
Dear All,

My query is regarding the ESI amount deduction from an employees salary.

If an employee whose salary is Rs.9500/-pm and we increase his salary to 11000/-pm then at what amount should we deduct the ESI on Rs. 10000(fixed amount) or Rs 11000/-. Please revert on urgent basis.

Thank you

Anu
Hi, folks

We all know that, employees who are drawing more than Rs.10000/- salary per month other than conveyance (regular payment) need not to pay ESI contribution.

Suppose, an employee is drawing gross salary less than Rs.10000/- per month (regular payment as per appointment order) in the beginning of the contributions period (from April 2009 to September 2009) and earning Variable Incentive, Production Bonus, Over time, Shift allowance separately in the same month. ESI contribution (1.75%) must be deducted from his total earnings.

In the middle of the contribution period ie., between April 2009 and September 2009, he got an increment and fetched to Rs.11200/- gross as regular payment per month apart from earnings like Variable Incentive, Production Bonus, Over time, Shift allowance. In such a case, employer must deduct ESI contributions on total gross + earnings like Variable Incentive, Production Bonus, Over time, Shift allowance till the end of contribution period. Deduction can be stopped from next contribution period onwards.

Example one employee gross and other earning, ESI deductions per month as follow:

Month
Basic
HRA
FI
Other Allowance
Gross
VI
PB
OT
SHA
TG
ESI Cont. (1.75%)
Contribution period from April 2009 to September 2009
April
5000
1500
500
1000
8000
0
1000
900
150
10050
176
May
5000
1500
500
1250
8250
0
1000
400
150
9800
172
June
7000
2100
0
2100
11200
673
600
600
200
13273
233
July
7000
2100
0
2100
11200
591
300
600
175
12866
226
Aug
7000
2100
0
2100
11200
306
200
400
100
12206
214
Sep
7000
2100
0
2100
11200
579
200
300
175
12454
218
Contribution period from October 2009 to March 2010
Oct
7000
2000
500
2350
11850
0
600
400
150
13000
0
Nov
7000
2000
500
2350
11850
0
600
400
150
13000
0
Dec
7000
2000
500
2350
11850
0
600
600
200
13250
0
Jan
7000
2000
500
2300
11800
0
200
400
100
12500
0
Feb
7000
2000
500
2300
11800
0
200
300
175
12475
0
Mar
7000
2000
500
2350
11850
0
600
400
150
13000
0




Apart from the above, ESI contributions must be made from employee’s payment of EL encashment by applying above condition. The ESI contributions and payment details of EL encashment should be submitted to the ESIC Corporation along with the half – yearly returns (form 6) submission.

Over and above one paisa in calculation of contributions should be rounded off to a rupee.

Acronyms:

VI: Variable incentive; FI: Fixed Incentive; PB: Production Bonus; OT: Over Time; SHA: Shift Allowance; OVP: other variable payments; TG: Total Gross; ESI Cont: Employee’s State Insurance Contribution


Give me your feed back to

winword2003 - Member Since: Oct 2005
Dear Anu, This time please find the attachment Ravi mravi@soma.co.in


Attached FilesProvided by community member winword2003. Join us to learn and grow with your peers.
File Type: doc ESI deductions.doc (70.0 KB, 501 views)

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