kirankumarr Started The Discussion:
i am getting 9250 rs as gross salary but the company is deducting esi of Rs.161,is it compulsory to deduct this. please let me know who can answer about this query.
Dear Kiran,

Yes, as per the Employee State Insurance Corporation Act, it's mandatory for every eligible employer to contribute towards ESIC, where the employee's gross salary is less than Rs. 10000. Thus, your employee is doing so, please read the below-mentioned amendment of this act, as the limit of salary was Rs. 7500 till Sep 31st 2006 and from October 1st 2006, it was increased to Rs. 10000.

Wage ceiling for coverage of employees under ESI is raised from 7500/- per month to Rs. 10,000/-

The Government of India has amended the Employees’ State Insurance (Central) Rules, 1950 and the same is called `Employees’ State Insurance (Central) (First Amendment) Rules, 2006'

Accordingly the wage ceiling for coverage of employees under ESI is raised from 7500/- per month to Rs. 10,000/- per month, with effect from 1st October 2006. In other words all those employees who receive monthly salary of Rs. 10,000/- or below will be covered under ESI and the employer will have to contribute 4.75% on their salary.

I hope, it's clear. Dont worry, ESI is a benefit to you at the smallest expense from your side. Ask for an employer guide from the local ESIC office or your employer. Believe me, it's more than Good and worth your money.

warm regards,

Umesh Chaudhary
What Mr.Umesh said is exactly right. Your employer is doing the right thing and it is statutory also. With the contribution of only 1.75% of Basic+DA, you can get the treatment from your nearby ESI hospital for yourself and your dependent family members and can also get the reimbursement of medicine cost as prescribed by ESI.
One thing you also should know that your employer is contributing 4.75%(which is more than your contribution) of Basic+DA towards ESI.
I hope this clarifies your doubt.
srihari rao
but sriharsha the % of deduction is 5.3 for the esi ie basic pay is 3000 & the deduction for esi is Rs.161. any way thankyou for your information.
My company is not dedcuting ESI , its a private ltd company ( IT and Recruiting), is it mandatory to deduct ESI irrespective of Act applicable to it.
Is ESI % age followed differently in different states i.e is it changeable or different through state or central govt?


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