Regarding ESIC Deduction - CiteHR
Madhu.T.K
Industrial Relations And Labour Laws
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
Maulik Dave
Hr Professional
Bharath Bhushan
Hr-professional
Amarsinh Patil
Asst Manager Hr/admin
+1 Other

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Dear Senior,
I am working as an HR with software development firm and I am new to this firm. In my company we are having 33 employees who are getting net salary more than 15000.
Recently we have hired one employee who was at a training and the CTC offered to him is Rs. 181200/- and his gross salary is Rs 15100 wherein employer and employee PF is included in his CTC.
Please explain would he be eligible for ESIC and also in my company nobody\'s gross salary is below 15000 so would my company be eligible for ESIC.
Looking forward for your guidance.
Thanks & Regards,
Ranjeeta

1. Sir, the term "CTC" is neither wages, nor this word has any legal meaning in the Acts as mentioned by you.
2. I will suggest you to go through the term "wages" as mentioned in EPF & MP Act, 1952 & EPF Scheme, 1952 as well as in ESI Act, 1948 and rules framed thereunder.
3. After deciding as to what constitute "wages" in above Acts, you may decide eligibility of employees under above Acts.

Dear Raneeta, CTC is not any meaning in ESI and PF calculation. You need to calculate gross wages for ESI as well as PF. Please go through as per Harsh’s reply. Amar
Dear Friends,
The query understood by me is as under:
Queriest has 33 employees. Gross salary of all the employees is more than Rs. 15000. Now the queriest has appointed new employee with gross salary Rs. 15100 inclusive of PF both share as CTC as stated by queriest. (how both the shares are included in CTC, the queriest only can give the answer). When gross salary inclusive of PF share is Rs. 15100 means gross salary is definitely below Rs. 15000.
Question by queriest are:
i. Is the newly joined employee having gross salary below Rs. 15000 coverable under ESI or not?
ii. Is the company coverable under ESI?
I would not like to give answers to above but would like to give here a link as under in which one can find correct answers. The link is: https://www.citehr.com/513289-esi-pf-registration.html

Dear Keshav Sir,

Thanks for understanding my issue completely.

Exactly i want to ask the same things.

Question by queriest are:

i. Is the newly joined employee having gross salary below Rs. 15000 coverable under ESI or not?

ii. Is the company coverable under ESI?

I read your thread which you have posted earlier on another query.

For the first question i got the answer that I have to get registered by company under ESIC.

ii) For the second one I got confused with discussing with others that the ESIC is not applicable where the Gross is above 15000, but I know that there are several components for calculation of ESIC.

His Breakup is like that

Basic: 6040

HRA: 3020

Conveyance: 800

Medical Reimbusements- 1250

Special Allowance:- 3390

Gross is 15100

Out of which Deduction

P.F. Employer Cont: 725

P.F Employee Cont: 725

PF Additional Charges: 97

Net Salary is 13553

Sir, please help me because whenever i am discussing the situation mostly the answer is you want have to get him registered for ESIC.

Regards,

Ranjeeta

Dear Ranjeeta ji, Employee’s Gross is above Rs.15000. Therefore, no ESI applicable to him. As well, you do not have any employee below Gross 15000, ESI Act is not applicable to you.
Dear member,
1. Though the opinion has been expressed by Sh. Koragaonkarji, senior member as above, but I have doubts about the nature of following allowances:-
(a) Medical Allowance;
(b) Special Allowance.
I will like to know whether the above 2 allowances are actually paid regularly in your wages by employer regardless of actual expenses. Or the same are paid at the close of financial year, as some MNCs are doing in respect of Medical Allowance. Further what is Special Allowance and how it is decided/calculated by management please indicate.
2 Please also intimate whether the amounts of PF employers' Contribution Rs.725/- and PF Special Allowance Rs. 97/- are also included in Rs.15100/-i.e. Gross wages of an employee as you have mentioned above.

Dear Ranjeeta ji,
Please check the total of gross you have given. It is wrong and lessor than Rs.15000 p.m.
Thanks Harsh Kumar ji who pointed out this to me.
I suggest, one should ask specific question in this forum giving specific and correct information.
It seems to me Dear Ranjeeta ji that the concept of Salary and CTC - the Basic, Allowances, Earning / Gross, Deductions from Earning / Gross, Net Payable, amount in hand etc. is not clear to you.

Hi, I suggest you to refer "Employee" definition also in ESI Act, Contract employees are also comes under the employee definition. Regards, Santosh
Dear Seniors,
I apologize for the mistake made by me during writing down my query.
1) Medical Allowance and Special Allowance are monthly paid with the salary.
2)Please also intimate whether the amounts of PF employers' Contribution Rs.725/- and PF Special Allowance Rs. 97/- are also included in Rs.15100/-i.e. Gross wages of an employee as you have mentioned above.
Answer:- Currently I have not added this two components (PF employer's contribution and PF additional charges in his salary as it will lower down his Gross Salary).
Currently, my employer is paying the PF for all the employees as the PF contribution employer side is not added in the CTC of any of the old employees.
This person was a newcomer and going forward my employer wants to cover PF under the CTC of every employee(old employee after their appraisals) and for new one to have it from now.
If you both can guide me it will be a great help for me.


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