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Calculation Of ESI Contribution - Insurance

A V Veerkar Started The Discussion:

I want some help in arriving at correct figure for employer's contribution for ESI.

To give an example
an employee has a salary of 8000 pm in Oct ( begining of contribution period) and thus employer's contribution is 4.75% of 8000 = 380 rupees. Now the salary increase to 12000 per month from January and thus he goes outside the ambit of ESIC. However he will have to contribute till the end of contribution period ie till March.
I want to know, from Jan to March, what will be the amount to be paid as employer's ESI contribution. Is it 4.75% of 12000=570 or 4.75% of 10000= 475 rupees ( 10000 being the maximum salary for which ESI is applicable)

A V Veerkar

welcomeumesh - Contributing Member
Hi,

At a salary of Rs. 12000 a month, this employee is out of ESI coverage and there is no need to contribute for the ESIC after the pay increase. Once the employee is not under the coverage you need not submit the contributions from the employee or employer's side. ESI is little different from EPF. Though even if you want to contribute, you can do so but at the actual salary that the employee is drawing.

regards,

Umesh
(umesh,chaudhary@ril.com)




















I want some help in arriving at correct figure for employer's contribution for ESI.

To give an example
an employee has a salary of 8000 pm in Oct ( begining of contribution period) and thus employer's contribution is 4.75% of 8000 = 380 rupees. Now the salary increase to 12000 per month from January and thus he goes outside the ambit of ESIC. However he will have to contribute till the end of contribution period ie till March.
I want to know, from Jan to March, what will be the amount to be paid as employer's ESI contribution. Is it 4.75% of 12000=570 or 4.75% of 10000= 475 rupees ( 10000 being the maximum salary for which ESI is applicable)

A V Veerkar

bagema - Contributing Member
Hi Till the end of the cycle ie Oct-Mar you need to deduct the ESI once started in Oct. The deduction would be complete salary ie 12000/-

Chandrasekar.S - Contributing Member
What bagema said is right ESI should be paid till the end of contribution period n for the full amount 12000 Chandrasekar

pradiptadatta - Contributing Member
ESI is payable on any employee irrespective of level having salary/wages within 10000/- pm. regards,

Thanks a lot bagema and Chandrashekhar,

That means for 12000 per month salary the employer will have to deposit 575 per month. It looks a little illogical. When upper limit for ESI coverage is 10000 beyond which it ceases to be applicable, one would expect that there would be cap of 475 rupees ( 4.75% 0f 10000 ) for ESI contribution. Strange are the ways of the law.

Anway thanks a lot for clarification.

A V Veerkar

Thanks. As trainee, doesn’t fall under the definition of Employee. Do we have to provide the medical insurance to the subject. Or the WC Act is applicable. reg

prashant_patil - Contributing Member
As they are trainee in your factory premises, & any accident happens with them you are responsible for it. So medical insurance is necessary. Regards

hi i want to know how an esi would b calculate from the both sides. PRAVEEN KUMAR (praveen0314@gmail.com)

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