Anonymous
As per below mention details, I am looking for useful/ applicable government notifications. Please help me with the same.

After the commencement of a contribution period, even if the gross salary of an employee exceeds Rs. 21,000 monthly, the employee continues to be covered under ESI scheme till the end of that contribution period.

The contribution is deducted on the new salary. Let us look at an example to understand this better.

If an employee’s gross salary increases in June from Rs. 18,000 (within ESI limit) to Rs. 22,000 (above ESI limit), the deductions for ESI will continue to happen till the end of the ESI contribution period i.e. September.

And the deduction amount for both the employee and employer will be calculated on the increased gross salary of Rs. 22,000.

At the end of the contribution period, if the employee salary is more than the ESI limit, no further deductions and contributions are required. The employee will still be covered under ESI till 30th June of the following year.

Similar rules apply when an employees salary increases in the 2nd contribution period.

From India, Mumbai

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