ESI is applicable to factories employing 10 workers and other establishments employing 20.
Those drawing salary not more than Rs 10000 are covered.
The rate of employees' contribution is 1.75 % of salary and the employer's contribution is 4.75%
The salary is the sum paid in a month and all payments which are paid in regular intervals of not exceeding two months are considered. As such, Travelling Allowance is exluded from salary.
If you want to escape from ESI, you have to frame a salary structure above Rs 10000. BUT WHEN THE SALARY CEILING IS AGAIN REVISED BY THE GOVT. YOUR EMPLOYEES BECOME COVERED AND AT THAT TIME THE CONTRIBUTION PAYABLE WILL ALSO BE VERY HIGH.
For an employer it is always desirable to have ESI coverage because many compensation payable by the employer under the Workmen's Compensation Act, Maternity Benefit Act are taken on shoulder by the ESI Corporation aganist this 4.75% contribution payable by the employer to the ESIC.
Thanks for this valuable information.
Could you please illustrate ESI contribution is calculated on what part of salary. I mean to say Basic or Gross Salary or Net salary or CTC. could you please tell me also what components of salary is considered for ESIC calculation.
With best regards,
One clerificatioin is required. We have few employees who got retined on attaining age of 58 years. We had issued fresh letter to them for extension with a lumsum amount with no statutory obligation or Bonus, LTA etc.
For Pf they withdrawn their amount with no further obligation on company. Will they be covered under ESIC?
I want to learn about Payroll. Can anyone please tell me, How can we calculate the PF and ESI. I have little bit knowledge about it. PF is calculated on the basis of Basic and ESI is calculated on the gross salary.
But What is the procedure to calculate it. I have read it. but I could not able to understand it Properly.
Please help me.
ESI :- ESI is a participative health insurance scheme.
Applicability:- The ESI Act, (1948) applies to following categories of factories and establishments in the implemented areas:-
- Non-seasonal factories using power and employing ten(10) or more persons
- Non-seasonal and non power using factories and establishments employing twenty (20) or more persons.
Ceiling Value:- 15,000 (Gross) w.e.f.1/5/2010.
Contribution Value:- (w.e.f. 1.1.97)
1.75 % (Employee’s Share)
4.75 % (Employer’s Share)
** Employees in receipt of a daily average wage upto Rs.100/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.
Wages for ESI Contribution:-
ESIC-Chinta Se Mukti
1) Any person employed for wages (up to Rs. 6,500) in or in connection with the work of a factory or establishment end.
2) Any person who is directly employed by the employer in a factory or through his agent on work which is ordinarily part of the work of the factory or incidental to purpose of the factory..
1) Free medical treatment is offered to covered employees at hospital and dispensaries run by the ESI Corporation.
2) About 7/12th of employees normal wage will be payable to him by ESI during sickness.
3) Maternity benefit for 12 weeks of which not more than 6 weeks should be preceding confinement.
4) Injury during/in course of employment resulting in temporary/permanent disablement entitles the covered employee to a regular payment to substitute his lost wages.
5) Death during course of employment entitles specified dependents to a regular payment.
6) One time payment of Rs. 1,500 to help meet funeral expenses.
For further information Please call at +91 9885578325(http\\:Human Resources | payroll | outsourcing | hr | software | Hyderabad | Information | Management | system | solutions)
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Hello Venugopala B A,
Thanks alot for your response.
Can you please describe me about PF
"For Pf 12% + 13.61 % from employer"
12% have to pay Employee and Contribution of Employer(13.61%) is also divided into different segment or not?"
Please also provide your email id, I have also some more queries.
we have 30+ employees in our company and registered for PF but not for ESI.
1. is it compulsory for us to register for ESIC? what will happened if not?
2. one more question, we are paying fix salary to some employees like Basic 12000+Conveyance 3000, are they also eligible for PF?
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