Meetu Singh
*The esic is not deducted on Gross Salary.
You have to see the breakup of salary components,
Make addition of all those components that constitute “wages” under the act.
It is this wages (amount) on which esic contribution is to be deducted or paid or payable from both side, i.e. Employee[1.75%] +employer[4.75%].
* If the employee is monthly paid (monthly rate,paid for actual month days) then wages are for the month days (30,31,28,29 as the case may be) irrespective of holidays authorized leave etc except LWP should be taken.
The Act prescribed different calculation for days for the different kinds of worker , i.e. piece rated, badli, time rated etc
In your case Here RS.14500 (which is < 15000) is taken as full monthly salary (time rated).
i.e 22(worked days) +4 (paid leaves)+weekly off (if any)
=22+4+4(suppose)=30days(total Month days)
Employees 14500*1.75% =254
Employer 14500*4.75% = 689
Total Contribution = 943
May this will help you

From India, Pune
Ms. Parul Gupta,
  • I am afraid, you are confused and you are confusing others too.
  • ESI Act no where mentions how to calculate monthly salary and which number of days to be considered while calculating salary.
  • Please note that there are no two different kind of salaries one which is paid and one calculated for the purpose of ESI contribution.
  • ESI Contribution is payable on actual gross salary paid to employee.

From India, Pune
I dont understand why you people are creating confusion by using word actual working days.
ESI is to be deduced on gross salary irrespective of working days if the gross salary is less than 15,000/-
Its a example, how a simple issue converted into confusing one.
Please avoid to give such type of comments on simple matter and that too on citi hr.

From India, Noida
Dear friend
Forget every thing. Deducte the ESI @ 1.75% as employee contribution for the total gross salary earned (Days worked 22 days, Leave with wages 4 days what about the balance days, Is it lop or paid weekly off. If it is weekly off you have to deduct for the whole month)

From India, Madras
Now ESIC is calculated online into their website, we just need to make a excel sheet where we need to specify total no. of working days of employees in a month and total salary given for same month & then upload the file into their website. All calculation will be done automatically in their system.

From India, Gurgaon
Dear Sir
There is confusion in deduction of ESI while employees work for 24 days, 5 days rest, 2 absent out of 31 days. His salary is as Gross 14000 ,Basic- 7569, HRA -30% gross =4200, Convayance = 1600 (fix) Other= 631. ON
What amount is ESI taxable.
Vipan Kumar Jogi

From India, Jalandhar

Dear Meetu Singh,
Firstly, you should have knows these things-
##Average daily wages (Central Rule):
(A) "Average daily wages during a contribution period" in respect of an employee, means the aggregate amount of wages payable to him during that period divided by the number of days for which such wages were payable;
(B) “Average daily wages during a wage period” means-
(a) In respect of an employee who is employed on time-rate basis, the amount of wage which would have been payable to him for the complete wage period had he worked on all the working days in that wage period, divided by 26 if he is monthly rated, 13 if he is fortnightly rates, 6 if he is weekly rated and 1 if he is daily rated;
(b) In respect of an employee employed on any other basis, the amount of wages earned during the complete wages period in the contribution period divided by the number of days in full or part for which he has worked for wages in that wage period:
Provided that where an employee receives wages without working on any day during such wage period, he shall be deemed to have worked for 26,13, 6 or 1 days or day if the wage period, be a month, a fortnight, a week or a day respectively.
## WAGES: How wages are computed for payment of contribution?
The following wage components are taken into account for computation of wages for payment of contribution-
a) Basic Pay,/Wages/Salary;
b) D.A/ HRA/ CCA/ Overtime/ officiating allowance/ Night shift allowance/ efficiency allowance/ Heat, Gas, Dust allowance/ Education allowance/ Food & Tea allowance/ conveyance allowance;
c) Wages/ salary/ pay for weekly off and public holidays;
d) Commission paid to sales staff;
e) Subsistence allowance paid to an employee during the period of suspension;
f) Attendance Bonus or incentive or ex-gratia in lieu of Attendance Bonus or production incentive;
g) Regular Honorarium or salary or remuneration paid to a Director;
h) Collection Bhatta paid to running staff.
i) Actual payments made towards leave salary, lay off compensation, or wages for strike period.
j) Any other remuneration paid or payable in cash to an employee if the terms of contract of employment, expressed or implied were fulfilled.
As per your above statement that employees is on paid leave i.e. he is eligible to full month salary without LOP. In this case Employee's ESI Contribution will be 1.75% of Rs.14500(gross salary).
If company paid salary with 4 days LOP then gross salary will be divided by 26 days and in this case Employee's ESI contribution will be 1.75% of 22 days gross salary.

From India, Delhi
month worked for 4 days. can i deducted esi.
From India, Kolkata
Hi Sir, A eomployee has worked 22 days but paylable day 26, while making esi challan (no of days worked) what will be given?
From India, Bengaluru

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