Employee Resigned in June, Paid ESI for July: How Can We Adjust This Overpayment?

Greetings,

One of our employees resigned in June itself, but we received the information in Aug-06. We prepared the salary for the month of July and paid the ESI contribution as well. Therefore, my question is whether we have paid an excess amount (i.e., July-06 contribution) into his ESI account and how to adjust the same in the next month's contribution.

I am awaiting your reply.

MKS

Once you have deducted and paid both shares through the challan, the excess amount will not be deducted from next month's salary.

For adjusting excess/short payment:

If the mistake is made before the contribution period ends, the amount can be adjusted. For example, in case the contribution period is from the 1st of April to the 30th of September and from the 1st of October to the 31st of March.

In your case, if the mistake is made before the contribution period has expired, excess payment can be adjusted before the September contribution is paid.

You have mentioned that an employee resigned in the month of Jun'06 and that you incorrectly paid the contribution for the month of Jul'06. In this scenario, adjustments can be made in the succeeding month before the half-yearly returns are to be submitted. The months fall between the contribution period of 1/4/06 - 30/9/06, and the returns are to be submitted only after the payment of September'06 is made. Therefore, you have the option of reversing this payment in the month of August'06 or September'06. The difference should be highlighted in the contribution register maintained every month.

Regards,
Anand