Hi Friends,
Supposing if the gross earnings of an employee is Rs 6741/-. The Employee contribution towards ESI is Rs. 113.24 (1.75% on gross)and the employer contribution towards ESI (4.75% on gross)is Rs.307.37
Now, my question is what would be the the amount of employee contribution towards ESI in the above cited example. will it be Rs.113/- or Rs 114/-.
The reason for asking this question is that we are remitting the contribution to the ESI authorities by rounding off to next higher rupee even if the contibution is less that 50 paise.
Is there anything wrong if the company ends up paying the contribution high.
Request you all to help me throwing your comments on this.
Regards,
pradeep
From India, Hyderabad
Supposing if the gross earnings of an employee is Rs 6741/-. The Employee contribution towards ESI is Rs. 113.24 (1.75% on gross)and the employer contribution towards ESI (4.75% on gross)is Rs.307.37
Now, my question is what would be the the amount of employee contribution towards ESI in the above cited example. will it be Rs.113/- or Rs 114/-.
The reason for asking this question is that we are remitting the contribution to the ESI authorities by rounding off to next higher rupee even if the contibution is less that 50 paise.
Is there anything wrong if the company ends up paying the contribution high.
Request you all to help me throwing your comments on this.
Regards,
pradeep
From India, Hyderabad
Hi Pradeep,
As per ESIC law u r supposed 2 submit the next higher value as contribution even it is less than 50 paise. u r doing nothing wrong if u r submiting more. if u r submiting anything less, then it becomes wrong.
hope this will clear ur doubts.
surya
From India, Pune
2As per ESIC law u r supposed 2 submit the next higher value as contribution even it is less than 50 paise. u r doing nothing wrong if u r submiting more. if u r submiting anything less, then it becomes wrong.
hope this will clear ur doubts.
surya
From India, Pune
Surya
ur Absolutely Right. earlier We also Used to Submit tHe amount As per Round off Of 50 Ps. But Further There Were Some Amendments and We started Paying off Next rupee Bot for ESIC & PF.
Thanks,
Rahul Sethi
From India, Delhi
ur Absolutely Right. earlier We also Used to Submit tHe amount As per Round off Of 50 Ps. But Further There Were Some Amendments and We started Paying off Next rupee Bot for ESIC & PF.
Thanks,
Rahul Sethi
From India, Delhi
you are not doing any wrong by rounding off to lower Ps.50. but its better ignore below ps.50. as the rule says. shahida
From India, Mumbai
From India, Mumbai
hiiiiiiiii friend, plz tell me this calculation is right? 6741/- *1.75%=?113.24 6741/-*4.75%=?307.37 if it is right so plz explain this calculation.
From India, Calcutta
From India, Calcutta
Hi!
According to the amended provision of Rule 51 of ESI (Central) 1950, both the employees' contribution and employer's contribution should be rounded off to the next higher rupee.This amendment has come in to effect from 1-10-2004. Prior to this, the rule position was to round off the employee's contribution to the next higher multiple of five paise, and the total contribution payable under one challan should be rounded to the whole rupee if the fraction is 50 paise or more.
After the amendment of the Rule from 1-10-2004, the procedure followed by you is in order.
From India, Hyderabad
According to the amended provision of Rule 51 of ESI (Central) 1950, both the employees' contribution and employer's contribution should be rounded off to the next higher rupee.This amendment has come in to effect from 1-10-2004. Prior to this, the rule position was to round off the employee's contribution to the next higher multiple of five paise, and the total contribution payable under one challan should be rounded to the whole rupee if the fraction is 50 paise or more.
After the amendment of the Rule from 1-10-2004, the procedure followed by you is in order.
From India, Hyderabad
Dear Pradeep,
Esi contribution for the salary Rs.6741/-(hope,washing allowance is not included in gross pay) will be as under:
1. 6741*1.75%=117.96 to be roundup to next Rs.118/-
2. 6741*4.75%=320.19 to be roundup to next Rs.321/-
TOTALLING RS. 439/-.
U r doing right but ur calculations are wrong as stated in ur query.
Regards,
KIRAN KALE
From India, Kolhapur
Esi contribution for the salary Rs.6741/-(hope,washing allowance is not included in gross pay) will be as under:
1. 6741*1.75%=117.96 to be roundup to next Rs.118/-
2. 6741*4.75%=320.19 to be roundup to next Rs.321/-
TOTALLING RS. 439/-.
U r doing right but ur calculations are wrong as stated in ur query.
Regards,
KIRAN KALE
From India, Kolhapur
From 1st October, 2004, the Rule 51 of ESI (Central) Rules, 1950 (Rate of contribution) has been amended according to which both Employee's contribution and employer's contribution for each month is to be rounded to the next higher rupee.
As regards the calculation for Rs. 6741, the Employees' contribution @1.75% works out to 117.96 and that Employer's contribution @4.75% works out to Rs. 320.19. By rounding to next higher rupee, it should be 118 and 321 respectively. Hence the payment made in this case is underpayment.
K.V.Ramana Murty, Hyderabad
From India, Hyderabad
As regards the calculation for Rs. 6741, the Employees' contribution @1.75% works out to 117.96 and that Employer's contribution @4.75% works out to Rs. 320.19. By rounding to next higher rupee, it should be 118 and 321 respectively. Hence the payment made in this case is underpayment.
K.V.Ramana Murty, Hyderabad
From India, Hyderabad
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Documents required for ESI Code.doc
ESI contribution rates lowering.pdf