ESI Calculation - Salary Caluculation - CiteHR
Harsh Kumar Mehta
Consultant In Labour Laws/hr
+1 Other

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Hello Seniors,

This is in regards to ESI calculations.

Previously our salary cycle was from the 1st to 31st. So ESI for this working month was submitted in the next month itself.

Now the challenge we're facing is since our salary cycle has shifted to 21st to 20th, there are two months in question. So ESI calculations now are a major roadblock.

Eg.

Salary of March (1st to 31st) paid to employee on 10th of April. ESI for March (1st to 31st) submitted on 10th April - No Problem at all

Now, Salary of May (21st April to 20th May) paid to employee on 1st May. How do we calculate the ESI now, where two months (April & May) are in question? Note that the ESI of May's Salary (21st April -20th May) in this case will need to be submitted on 10th June.

So if an employee joins us on 21st April, his ESI as per above statement, will need to be submitted on 10th June. Thats two different months later. The ESI system says if DOJ is 21st April then ESI should be submitted in May and not in June.

Please help us with this.

Hi,
I understood your problem, in this case you have to adjust his DOJ on 01st May to enable the ESI.
And coming to the contributions, however you will pay the salary to the employee for last month 10days+31days of may on 31st May or 01st June. So his salary would be included 41days salary and that can be taken as his Gross Salary for the first month contribution and going forward you can pay his contribution as usual along with all the employees.
Employee is not going to be affected with DOJ concerned to the benefits, how ever it is enough to have 72 working days in a contribution period in order to avail all the ESI Benefits.
With Best Regards
Ravichandra

Sir(s),
Please see Section 2(23) of ESI Act, 1948 which defines "wage period". Similarly, please also refer to Regulation 31 of ESI (General) Regulations, 1952 which prescribes time limit within which payment of contribution is to be paid.
If you have revised wage period and the same is not calendar month, as per above regulation the contribution shall be paid within 21 days of the last day of the calendar month in which the contribution falls due.
If you are facing online problems in such payment of contribution, you can contact the appropriate Branch Office of ESIC.

Sir,
Thank you for your views.
I do have one question though. Our pay cycle ends on 20th of every month so how would we calculate 41 days of salary? Salary payable would be from DOJ 21st April to the end of the cycle which is 20th May.
Thank you once again in advance.
Regards,
Mark

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