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Dear friends, I need the detailed eligibility criteria for an employee for ESI contribution. Please suggest any special salary structure to safe guard from ESI authorities.
From India, New Delhi
ESI is applicable to factories employing 10 workers and other establishments employing 20.
Those drawing salary not more than Rs 10000 are covered.
The rate of employees' contribution is 1.75 % of salary and the employer's contribution is 4.75%
The salary is the sum paid in a month and all payments which are paid in regular intervals of not exceeding two months are considered. As such, Travelling Allowance is exluded from salary.
If you want to escape from ESI, you have to frame a salary structure above Rs 10000. BUT WHEN THE SALARY CEILING IS AGAIN REVISED BY THE GOVT. YOUR EMPLOYEES BECOME COVERED AND AT THAT TIME THE CONTRIBUTION PAYABLE WILL ALSO BE VERY HIGH.
For an employer it is always desirable to have ESI coverage because many compensation payable by the employer under the Workmen's Compensation Act, Maternity Benefit Act are taken on shoulder by the ESI Corporation aganist this 4.75% contribution payable by the employer to the ESIC.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu,
Thanks for this valuable information.
Could you please illustrate ESI contribution is calculated on what part of salary. I mean to say Basic or Gross Salary or Net salary or CTC. could you please tell me also what components of salary is considered for ESIC calculation.
With best regards,
Manoj

One clerificatioin is required. We have few employees who got retined on attaining age of 58 years. We had issued fresh letter to them for extension with a lumsum amount with no statutory obligation or Bonus, LTA etc.
For Pf they withdrawn their amount with no further obligation on company. Will they be covered under ESIC?
Bibek
From India, Calcutta
Hello Sir/Madam,
I want to learn about Payroll. Can anyone please tell me, How can we calculate the PF and ESI. I have little bit knowledge about it. PF is calculated on the basis of Basic and ESI is calculated on the gross salary.
But What is the procedure to calculate it. I have read it. but I could not able to understand it Properly.
Please help me.
Thanks,
Rajwant
From India, Chandigarh
dear raj
For Pf 12% + 13.61 % from employer
For ESI 1.75% + 4.75% on gross which is not more than 15.000/- salary( employee who is getting the salary below 15000/-)
And PT as per state PT act.
and TDS as applicable
From India, Bangalore
Hello Venugopala B A,
Thanks alot for your response.
Can you please describe me about PF
"For Pf 12% + 13.61 % from employer"
12% have to pay Employee and Contribution of Employer(13.61%) is also divided into different segment or not?"
Please also provide your email id, I have also some more queries.
Thanks,
Rajwant
From India, Chandigarh
Dear Seniors
,
please help...
we have 30+ employees in our company and registered for PF but not for ESI.
1. is it compulsory for us to register for ESIC? what will happened if not?
2. one more question, we are paying fix salary to some employees like Basic 12000+Conveyance 3000, are they also eligible for PF?
please advice
From India, Pune
Dear All,
Our total employee strength is 85 but people falling under the ESI slab is just 5. Please let me know whether these employee should be covered for ESI or since our total employee falling under ESI is just 5 we need not cover them under ESI...Please reply at an earliest.
From India, Bangalore
I am forming new sole proprietorship firm. I will hire engineers and supply the same to some companies on contract basis. I have got first order to supply 5 engineers for 1 year. I have not yet hired any engineer on my role but will do shortly.
Should I apply for ESI registration in advance before even not hiring? OR can I apply after hire and supply?
br
sanjay
From India, Delhi
Sir(s),
1. Employment of at least 10 or more person is required in order to make any "shop" eligible for separate coverage and obtaining of separate code number under ESI Act, 1948 and rules/regulations framed thereunder.
2. However, if the principal employer to whom you want to supply the engineers on contract basis agrees, then you can make compliance in respect of ESI on the code number of principal employer itself.
3. I hope, you may also be aware that present coverage limit under ESI Act is Rs. 15000/- per month. Therefore, this aspect may kindly also be kept in view while considering coverage under above Act.
From India, Noida
Hi all, we have small scale industry and 60 employees therefore we want to applicable PF and ESIC in our company.how can we do
From India, Mumbai
i am Insurance person (IP) then my salary more than 15000 . so please solve this question , i am able for receive amt. for medical when i am injured.and which percentage compensation
From India, New Delhi
If any organisation/autonomous body does not deduct ESI of any employee out of 230, whether any judiciary act is exist ?
From India, Meerut
hi
can please all share what decision all are taking in respect of esi deduction in pursuance of threshold limit 21000 as draft rules has been issued.
i came to know that some organizations are deducting in assumption that it may be applicable restrospective.

Sir, amendments in the ESI (Central) Rules, 1950 are generally prospective and not retrospective.
From India, Noida
Hi
Thanks for the reply...As there was an amendment in Bonus act with restrospective effect, we have concern because of this reason. is it valid to deduct contribution and refund in next salary if no restrospective amendment come up. Pls share.

Hi,

Salary Structure based on ESI ACT:-

The following items will form part of the wage both under Section 2(9) i.e for considering the employee for the purpose of coverage and Section 2(22) of the ESI Act for the purpose of charging of contribution:-

1. Matinee allowance which is being paid to employees in Cinema Houses.

2. Shift allowance paid to employees who work on shift duty at odd shifts.

3. Location allowance paid, in addition to Dearness Allowance to meet the high house rent.

4. Compensatory allowance.

5. Cash handling allowance paid to Cashier.

6. Supervisory Allowance.

7. Additional pay paid to training staff.

8. Charge allowance

9. Steno/Typist allowance

10. Plant allowance

11. Honorarium for looking after the hospital/dispensary

12. Computer allowance

13. Gestetner/Photocopier/Printer allowance

14. Personnel/Special allowance

15. Machine allowance

16. Convassing allowance

17. First-aid allowance

18. Personnel allowance – Pay over and above the basic wage and Dearness allowance for skill, efficiency or past good records.

19. Area allowance - given to employees living in a particular area to meet the high cost of living in that area.

20. Exgratia payment if payment is made within an interval of two months.

The following items will not form part of the wage either under Section 2(9) or under Section 2(22) of the ESI Act:-

1. Payment made on account of un-availed leave at the time of discharge.

2. Commission on advertisement secured for Newspapers, if not paid to the regular employee.

3. Fuel allowance/Petrol allowance

4. Entertainment allowance

5. Shoes allowance

6. Payment made on account of gratuity on discharge/retirement.

7. Payment made on encashment of leave..

Please find the attachment for much more clear view on some allowances...
From India, Chennai

Attached Files
Membership is required for download. Create An Account First
File Type: docx ESI - Allowances Rules - Salary.docx (22.3 KB, 50 views)

Hi,

Salary Structure based on ESI ACT:-

The following items will form part of the wage both under Section 2(9) i.e for considering the employee for the purpose of coverage and Section 2(22) of the ESI Act for the purpose of charging of contribution:-

1. Matinee allowance which is being paid to employees in Cinema Houses.

2. Shift allowance paid to employees who work on shift duty at odd shifts.

3. Location allowance paid, in addition to Dearness Allowance to meet the high house rent.

4. Compensatory allowance.

5. Cash handling allowance paid to Cashier.

6. Supervisory Allowance.

7. Additional pay paid to training staff.

8. Charge allowance

9. Steno/Typist allowance

10. Plant allowance

11. Honorarium for looking after the hospital/dispensary

12. Computer allowance

13. Gestetner/Photocopier/Printer allowance

14. Personnel/Special allowance

15. Machine allowance

16. Convassing allowance

17. First-aid allowance

18. Personnel allowance – Pay over and above the basic wage and Dearness allowance for skill, efficiency or past good records.

19. Area allowance - given to employees living in a particular area to meet the high cost of living in that area.

20. Exgratia payment if payment is made within an interval of two months.

The following items will not form part of the wage either under Section 2(9) or under Section 2(22) of the ESI Act:-

1. Payment made on account of un-availed leave at the time of discharge.

2. Commission on advertisement secured for Newspapers, if not paid to the regular employee.

3. Fuel allowance/Petrol allowance

4. Entertainment allowance

5. Shoes allowance

6. Payment made on account of gratuity on discharge/retirement.

7. Payment made on encashment of leave..

Please find the attachment for much more clear view on some allowances...
From India, Chennai

Attached Files
Membership is required for download. Create An Account First
File Type: pdf ESI - Allowances Rules - Salary.pdf (225.7 KB, 42 views)

1. Sir, I think, there is apprehension in the minds of HR people that now when the intention notification has been published for enhancement of wage ceiling under ESI Act, 1948 as on 06/10/2016, Govt. can implement the said enhancement from any retrospective date in final notification which is expected to be issued after elapse of 30 days. In this connection, I may submit that by examining past practice of the Govt., I think, there appears to be no reasons for such apprehension. For example, the last enhancement of wage ceiling under said Act was carried out by following the procedure as per details mentioned below:-

(a) Date of intention notification: 27/02/2010.

(b) Date of final notification: 20/04/2010.

(c) Date of effectiveness of such enhanced wage ceiling : 01/05/2010.

2. From above, it is quite clear that earlier such enhancement of wage ceiling was not retrospective, but sufficient time was allowed by the Govt. It is pertinent to mention here that the wages for the month of May, 2010 were as per practice paid either as on last date of month or on 7th of next month. And the contribution for the May, 2010 was payable to ESIC by 21st June, 2010. Therefore, I personally feel that there should not be much apprehension on the subject.

3. However, since the actions of the present Govt.are sometimes found to be unpredictable / unforeseen, we have no alternative except to wait for the final notification. I think, issuing of final notification making it effective from any retrospective date will be a good plea for the employers / affected persons for contesting such enhancement of wage ceiling from retrospective date. We may hope for the best.
From India, Noida
I am confused Harsh, If I have a gross salary of 15,000 and the number of people employed is less than 10, are we still eligible for ESI.
From India, Jammu
once covered, there is no exit in ESIC and EPF for establishment, they have to contribute even upto single employee




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