Esi - Esic [Thread 127801]

Is ESI deducted from gross salary or from basic salary?

Hi, ESI is deducted over the Gross Salary and 1.75% of GS deducted as Employee Contribution and 4.75% additionally deposited by the Employer. Anurag

Dear Priyanka, Mr.Anurag is right.............. You can visit to www.esic.nic.in for more information about ESI. Regards Amith R.

Yes, Anurag is right. Esi is deducted on Gross per month salary (Employee 1.75% and Employer 4.75% of Gross salary). The maximum ceiling to be covered under ESIC is gross 10,000/- per month. Regards, Amit Seth.

For the purpose of ESI, the wages or salary means the Basic Wages + Dearness Allowance or Special pay or any other allowance by whatever name called including House Rent Allowance which are paid in intervals not exceeding two months. But any travelling allowance paid shall not form part of salary for the purpose of calculation of ESI contribution. Similarly, any Overtime Wages paid will qualify for contribution whereas overtime wages will not form part of salary for the purpose of deciding the eligibility of an employee for coverage of ESI Act. Regards, Madhu.T.K

Hi ESI is deducted from the gross salary per month as (1.75% share from employee and 4.75% from employer). the employees whose is Gross salary less than or equal to Rs. 10,000/- (per month) will be covered under ESI. Eg:- Basic - 5000/- HRA - 1500/- Conveyance - 1000/- TOTAL = 7500/- Therefore, ESI deduction from employee share will be 7500*1.75% and employer share will be 7500*4.75% i hope this will help you out. Regards Nitu

Hi Madhu The salary structure of our organization includes Basic, HRA, Special Allowance and Conveyance Allowance and we are deducting ESI contribution from the gross salary. Since, we are paying conveyance allowance to every employee as a part of salary, can we exempt this allowance from the qualifing amount for contribution of ESI ? Regards, Sivadasan

can any tell me . what is the format of paying esi like for pf we have challan system . regards anand

Dear Sivadas, You have to deduct and contribute ESI on the salary excluding Travelling/ Conveyance allowance. At the same time Special Pay/ Allowance will be treated as part of salary unless it is proved that the same is paid only to a particular employee or class of employees as part of conditions of employment. Regards, Madhu.T.K

In case gross salary (Basic+DA+HRA+Special pay) of an employee is more than 10,000/- p.m. is he automatically exempted from the scheme?