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Hi I'm Balaji
I just joined with you.
If an employee contributing ESI at his gross Rs.9000 and his Gross hiked to 11500/- whether he has to continue to contribute till the half-yearly contribute to close.
If yes on which amount he has to contribute :
Ex; for April & May his salary 9000 and paid ESI contributed on 9k
now his salary 11500. so he has to contribute on 9k 0r 11k..?
Pls clarify the experters..........Thanks......balaji
14th July 2008 From India, Kochi
Hi , I am attaching document. Hope this help you. Please let me know if you need any help. Regards Suman
14th July 2008 From India, Calcutta

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Hi! Balaji
The ESI contribution need to be deducted on 10000/- not on his 11500/-. And yes you have to continue the contribution as per the ESI calendra i.e April to Sept and Oct to March. You can stop the contribution after Sept 08.
14th July 2008 From India, Mumbai
Dear all,
If any employee crosses the ESI limit during the contrbution period by virtue of any arear, Increment etc than he / she will remain the member of ESI till that period of contribution and the ESI contribution will be on the increased wages and not on 10000/- as mentioned by Chitra.
Hope this will clear your query.
14th July 2008 From India, Delhi
Hello dear, if the gorss salary hike up to 10000 then from that month there is no need to deduct the ESI contribution. so pls to stop to deduct the ESI contribution. Regards Chirag Panclholi
15th July 2008 From India, Vadodara
If i am right then you have to deduct on the revised salary even though the salary get incresed more than 10,000 up to the contribution period. MRN
15th July 2008
Dear Chirag,
You can stop deducting ESI contribution, once the contribution period is over.
For Eg. if any employee got the increase during the Month of April, then the employee will remain the ESI member till september and ESI deduction has to be there for that contribution period. He/she will be exempted from the deduction only from the next contribution period onwards, i.e. from October onwards.

16th July 2008 From India, Delhi
Dear all
If the salary is raised during the contribution period ie April to September and october to march the ESI contribution to be continued for the raised salary only not for the ceeling amount.
17th July 2008 From India, Madras
hi everybody,
i've a small doubt regarding the calculation. As Mr.Balaji said, the employee is already the member of ESI. so, why can't the deductions be done though his Gross is upto 10000 or more....
Kindly clrify me the doubt, as i'm also in this process.
17th July 2008 From India, Hyderabad
If the employee already contributing ESI at his gross Rs.9000 and his Gross hiked in between with in the six months period we have to deduct the ESI contributions till end of the contribution period.

The amount he has to contribute:
now his salary 11500 so he has to contribute on 11500 only not for 9000

17th July 2008 From India, Hyderabad
If an Employee has got increment in the month of June 2008 from Rs 9500 to Rs12000 but however which is effected retrospectively and the same arrears for the april & may 08 had been paid in the month of june only (w.e.f april 2008). in such sinario whether employer has to cover the employee to till completion of the contribution period (i.e.october 2008) or employer can stop the coverage under ESI rules?
kindly clarify along with case law if any.
17th July 2008 From India
i have some dought if employee has not coming from last 2 month on which basis he will abscoding or terminating & also send me the matter which i have to put in his letter. Thanks & Regards, Vaibhav
17th July 2008 From India
ESI will be deducted on 10000
and if we are paying arrears
ESI will be deducted on the differential amount.
e.g : Current Salary is Rs. 9000
Revised Salary is Rs. 11000
ESI will be deducted on 11000 - 9000 = 2000
17th July 2008 From India, Chandigarh
In case the employee gross has exceeded the ESI limit, then thier shall not be any deduction for ESI. As per the government laws, the ESI maximum limit is 10,000/-, therevore in case the employees' gross has exceeded the certain amount then his/ her name can be pull out from ESI. For this, an application can be submit to ESI organization to pull out the names.
Thanks & regards
18th July 2008 From India, Gurgaon
Dear Friends, We need to deduct until that period i.e on going half year is completed. Regards Amith R.
18th July 2008 From India, Bangalore
not like that. We have to stop deducting the ESI from which month he has crossed the slab of 10000/-
18th July 2008 From India, Madras
mr.rajeev verma has given the correct way of deducting the esi contribution.. also the contribution will continue for that contribution period ( till September 08) . however, his benefit period will continue till march 2009
18th July 2008 From India, Mumbai
Dear Rajeev,
Thanks for the info.
i have a small query i. e. if an employee wants to continue the ESI contribution even after the salary hike to Rs. 11,000/- & want to take the services of ESI to his family due to his needs. is it possible?
Thanks & Regards,
18th July 2008 From India, Bangalore
Dear All
As per Employees’ State Insurance (Central) Rules, 1950, Section 50 - The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be Ten Thousand rupees a month :

Provided that an employee whose wages (excluding remuneration for overtime work) exceed Ten thousand rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
Also in reply to Sujathas query - the wage limit for coverage as per the rules has exceeded and if the contribution period has also ended, the employee will not be a covered employee
19th July 2008 From India, Kochi
Dear Chirag,
Rajeev is correct. The esi deduction should be made till the end of contribution period though the individual cross the esi ceiling in between the contribution period.
Hariharan N

19th July 2008 From India, Madras
I had recently join at medplus for bangalore, Head office located at hyderabad only, now we paying pf challans at hyd for karnataka emps,i have doubt i have take pf saperate code for those/ we pay at hyd only, it is necessary to take saperate code.
19th July 2008 From India, Hyderabad
You are not correct Ms. Manisha, there is no provision in the ESI Act/Scheme (there is no other law governing ESI Scheme than ESI Act and the scheme framed thereunder) w.r.t. exemption of an employee after his/her Salary increases over the coverage ceiling.I have been practising ESI/EPF Law and labor laws as Consultants for last 13 years and I have necessary proof to support my claim. In case, you need some clarification, please ask but don't guide anyone wrong.
19th July 2008 From India, Delhi
There is no need to take seprate code number for the employees working in BLR or for that matter anywhere else in India. It is just that the EPFO are concerned with the coverage aspect of an oragniasation and its employees and as long as the same are done locally or centrally there is no problem. However, sometimes, from the point of view Accounting or administration purposes many companies opt for seprate code in each state/district. Also,there is a provision in the EPF Scheme to allot seprate code number,if the administration in the single code is difficult and an employer applies to get some of its branches in the same city covered under a different code number than the other.In this case, the original code number is suffixed with "A", "B" and so on.
19th July 2008 From India, Delhi got the dates wrong. The benefit period starts after expiry of three months from the close of the contribution period. In case of the period ending September 2008, the benefit period commences from 01.01.2009 and go on till 30.06.2009 and not till 31.03.2008.
19th July 2008 From India, Delhi
Hi Balaji His Salry is 9000/month he is in coverage of Esi but when his salry is hiked more than 10000 he is out of coverage of his ESI will not deducted. with regards Anil Kumar Executive HRA
19th July 2008
Dear all i saw all ur replais some body is Half off correct the correct answer is if the employee cross the 10000 i.e,10001 no need to deduct the ESI contribution but if he crossed that limit in between return period i.e, April-September and Oct-march if we take this case he crossed the limit in June so we will deduct the contribution up to September that contribution must be deducted up on total gross i.e,11500 after September we can stop the deduct the contribution up on 11500(total gross)ok have a nice day bye catch me on 9346526033
19th July 2008 From India, Visakhapatnam
Hi, if the ESIC once paid in contribution period suppose in the moth of april on Rs.9600 and his salary increases to Rs 11500/- in the month of May ,than we are required to pay on whole sum ( i.e Rs. 11,500/-) till the continuation of the contribution period ( till september)
19th July 2008 From India
If the salary is raised during the contribution period from
April to September
and october to march
the ESI contribution to be continued for the rest of months on total incresed gross not on the ceeling amount.
because the benefits of this contribution period is for next 6 months
19th July 2008 From India, Pune
ESI @ 1.75% to be deducted from employees gross salary (increase) & employers also has to contribute 4.75% on same gross salary.
Samarth Associates
ESI, PF & Labour Law Management Consultant.
20th July 2008 From India, Mumbai
Hi all, No need to deduct ESI if the salary is more than or eaual to 10100... Regards, Vennila
20th July 2008 From India, Madras
Dear Balaji,
We faced this problem in our company a year ago.
We have keep paying till September if you have already paid for April.
However the amount to be considered for deduction is debatable.
As a precaution we paid for the revised amount and not limited to Rs.10,000/-. The difference for 8 of such employees was around Rs.2,500/- only.
Therefore if the number of employees are less you can go ahead and pay up for revised amount to avoid delay. If the number is huge - wait till I get a legal opinion on this. :p
Warm Regards
Sandeep Powar

21st July 2008
Hi Minkoo,
thanks for correcting me. i have read article on ESI and its deductions. thats why written. I would be happy if you can provide me some more information in this area.
thanks and regards
21st July 2008 From India, Gurgaon
21st July 2008 From India, Benaulim
Hi, As suggested by other freinds, Salary exceeding Rs.10,000/-, there will be no esi deduction. bye Katyayani
22nd July 2008 From India, Hyderabad

Regarding the question of Mr Balaji, I find some answers wrong and some correct. Let me explain the legal position.

"Employee" for the purpose of compliance under ESI Act is one whoses wage is 10,000 or below that, provided that if wage goes beyond this threshold during a particular Contribution period (April to September and October to March), he will continue to be Employee during that particular contribution period, and not lthereafter - Provision to Sec 2 (9) (b) to ESI Act.

Contirubtion need to be paid on Wage as defined in Sec 2 (22). There is no limit provided in the definition.

Hence contribution need to be paid on actual wage paid or payable during the currency of Contribution period, (not merely for Rs 10,000) if the Employee was drawing Rs 10,000 or below in the commencement of the Contribution period that is April or October. You can not restrict to 4.75%/1.75% of Rs 10,000.

Good HR man should ensure that wage increase/increment etc Start from April or October, in case of those whoes wage is below 10,000 pm, to avoid this.

O. Abdul Hameed
Formerly Additional Commissioner
ESI Corporation.
22nd July 2008 From India, Coimbatore
Esi will be calculted on the current gorss till the contribution period end after that employee will be excluded.
22nd July 2008 From United States, Chicago
hi Suman,
For your information, You was added this sheet was only mention contribution period employee ,whose salary below 10000,but as per u r information if gross salary increase in middle of contribution then total contribution amount which is also raised automatically within end of contribution period.
24th July 2008 From India, Pune
Hi All,
The Esi Contribution will be calculated on the Gross Wages (Whether 11500/- or it is 115000/-) and will continue till September or April of the corresponding Year..
Jenender Chawla
26th July 2008 From India, New Delhi
Dear Friend,
If the employee salary excedes more than Rs.10,000/- per month, the employee is exempted from the scheme.
Relating to your querry in the contribution period the employee salary excedes Rs.10,000/- you will continue such employee up to the period.
The contribution is to be deducted as 1.75 % on Rs.11500/- till the end of the period i.e.up to September.
This is for your Kind information.
P.V.Rama Rao
28th July 2008 From India, Hyderabad
Dear All,
For the benefit of all I am giving the link related to ESI. The link can be followed for more enquiry.
E S I Act
28th July 2008 From India, Delhi
Let me know about the pf deduction
ie 12 % on basic as employee contribution & 12 % on basic as employer contribution.
Sealing limit is Rs 6500/month
My doubt is Suppose a employee gets Basic & D.A together for Rs.11000 whether we have to deduct from employee & employer contribution is for sealing amt of Rs.6500 or Rs.11000 (Employer is willing to pay his contribution for Rs.11000)
pl clarify
30th July 2008 From India, Madras
dear all, any idea as to for how many years do we have to keep all the records to facilitate inspection from esi inspector? at present esi inspector wants to examine my company documents for the year 2000 - 01. It is very difficult to dig out old cash book etc. Is there any law governing this?
2nd October 2008 From India, Ernakulam
Well there is no specific period mentioned in the ESI Act regarding the back period for which you are required to keep the records ready for Inspection by the ESI Inspectors. There is one provisions regarding the Inspection Book, wherein it is mentioned that the ESI Inspection book is required to be kept safe for five years from the date of last inspection. As per the new inspection policy, routine Inspection are not done, only the defaulter units or the randomly selected units are inspected. However, you are still required to keep your accounts books ready for their inspection. Further, as per this policy no inspections are being done without the simultaneous checking of Ledger records.

Now, your question is regarding the Law by which this is governed? ESI Act doesn't lay down any specific period for keeping of records except Inspection book. However, there is a provision in the Income Tax Act wherein an Assesee is required to keep the last seven years of their records safe-(Your CA may throw more light on this). So many of my clients whenever they are asked about the production of old records quotes this provision and give them a letter and the same genrally accepted by the department. Now you are being asked to produce the records for 2000-01 which is in my opinion you must produce else they'll claim ad-hoc contribution on anything they may deem fit and in the court of law you'll not be able to defend yourself just by making a plea that the records are old and hence untraceable because the ESI'll say that there is nothing in the ESI Act regarding this and even IT Act requires the safe keeping of last seven years records.
2nd October 2008 From India, Delhi
Dear Rajiv,
you are obsolutely correct even increment took place in between the contribution period then ESI contribution shold extend till the completion of the contribution period.But what will happen in case where decision of increment has delyed (.i.e. say till july) thereafter the increiments had provided retrospectively from the begining of the contribution period say from April.
In such cases I believe that ESI Deductions shold stop immediately in those cases where the gross salaries have crossed Rs 10000 after considering the incriments.and the deductions pertains to the earlier period (i.e.apr, may, june) should be refunded to those employees and Employer,s contributions can be setoff against the ensuing periods contributions.
I hope iam clear about this, in case any qurries wrt to this please revert me back
Sathyanarayana Bhat
7th August 2009 From India
hi this is ketan can any say the relevent section or the relevent provision over the continus applicability on an employee even if the salary is raised beyond 10,000.00. Thanks Ketan
9th October 2009 From India, Calcutta
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