Need Confirmation On ESI Eligibility , This Is Based On Gross Salary Or Net Salary - CiteHR
Apex Management
Labour Laws Consultants
Legal Advisor Compliance And Benefit
Srinath Sai Ram
Hr Manager
Hr Consultant
Founder And Mentor @ Ethical Business Strategists

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HI All
ESI Deduction is Based on Gross Salary or Net Salary as per New Rules of ESI
i have this components in my Salary , is i am eligible for ESI deduction
Basic Salary – 10200
HRA – 5100
Personal allowance – 2386
Conveyance Allowance – 1600
Advance Bonus – 2040
PF Contribution - 1224
this is the Salary structure Per month , is this Eligible for ESI deduction ..

for ESI contribution gross monthly salary is taken in consideration
advance bonus should not be paid "monthly" it is violation of bonus act, and if paid monthly basis, it would get included in ESI eligible salary.
PF contribution of employee is covered under ESIC, but employer's contribution is not covered.

Dear all,
The total salary comes to Rs.22550/- per month as per break up as given i.e. Basic Salary – 10200 HRA – 5100 Personal allowance – 2386 Conveyance Allowance – 1600 Advance Bonus – 2040 PF Contribution - 1224 and the present ceiling limit is Rs.21000/- per month.
Now, two allowances viz Advance Bonus (call it as interim bonus) and Contribution to EPF is not wages hence the total earnings comes to Rs.19286/- which is covered under the ESIC.
P K Sharma

Hi All
Recently due to ESI Changes i got my Salary Restructed , but in Restructure is see that ESI Paid by Employeer also included on My Salary on .. is this Correct , Bcoz as far as i know only Employee Share (1.75%) only they need to Deduct , the Employer share (4.75%) should be Beared by COmpany Rght , plz Suggest me .

Hi Everyone,
This is for your kind attention that Esic applicable on Gross earning up to Rs. 21,000/- (Gross wages/salary, whatever you have earned including monthly bonus).
Aside Pradeep: I think you have gotten your appointment letter with CTC calculation and that's why your company deducting both side contribution from your salary. so please ask to your company for revise your appointment letter as per current status of your employment.
Thanks & Regards

Ashish Shaw


The term 'wages' as defined u/s 2(22) of the ESI Act in comprises of -

- Any remuneration paid or payable to an employee in cash and/or bank, in compliance with terms of the contract of employment

- Any payment to an employee in respect of any period of authorized leave, severance, retrenchment, or any other lay offs, legal in nature.

- Any other remuneration, if paid at intervals not exceeding 2 months (e.g.monthly performance/target bonus/incentive), including overtime.

What's excluded is -

a. Employer's contribution to provident fund and any pension fund or under ESI Act,

b. Any LTA , LTC or TA

c. Any reimbursements for discharging official duties/responsibilities or any special expenses entitled to him by the nature of his employment or any reimbursements forming part of the salary structure, within legal limits as prescribed in the IT Act

d. Gratuity payable/paid on cessation of employment.

In this specific case the Wages = Basic Salary 10200 + HRA 5100 + Personal Allowance 2386 + Conveyance Allowance 1600 = 19,286, which qualifies for the ESI liability provision.

I hope this helps!

Best wishes.

Log in to ESI Employee Portal with your ESI Insurance # to know the Gross Salary on which ESI Contribution is remitted & Amount of Employee Share of ESI Contribution remitted.
Alternatively, verify your Pay Slip for more clarity.
Later on bring to the notice of the Employer discrepancies, if any

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