Struggling with ESIC Calculation for a 10,000K CTC? Need a Spreadsheet Formula!

Hi Friends,

Greetings! Can anyone help to calculate ESIC? How would it be calculated if the CTC is 10,000K? Is there any specific formula to calculate in a spreadsheet? If anyone has this, please send it to me. I really need this.

Thanks,
Soma

Hi,

ESIC is deducted for the people whose gross is $10,000 or below. Be clear that it is deducted from the gross amount and not the CTC. ESIC is calculated at 6.75%, with the employer's contribution being 4.5% and the employee's contribution being 1.25% of the total.

Hope this information helps you.

Bye...

Dear,

I have seen the contents for ESI purposes. In this regard, I would like to state that employees receiving a Gross Salary of 10,000/- or below are entitled to ESI benefits. You have to deduct 1.75% from the employee's contribution and 4.75% from the employer's contribution, totaling 6.50% to be deposited with ESI on a specific challan with State Bank of India or other banks mentioned for this purpose.

With regards,
Shish
Delhi

Hi,

Shish is absolutely right. Total ESI contribution is 6.50% of the Gross Salary. All those employees who are getting Gross salary up to Rs 10,000 per month (Effective from 01 Oct 2006. Earlier the limit was Rs 7,500 per month) have to be covered under ESI. Out of this 6.5%, 1.75% is the employee's share and 4.75% is the employer's share. An employer has to fill up the ESI challans every month and submit the challan to the State Bank of India's branch along with the contribution cheque. The cheque has to be drawn in favor of the State Bank of India ESI account. The challan should be submitted latest by the 15th of every month. For collecting the receipt of the Challan, an employer has to again go to the same SBI branch after a week's time.

The formula is as follows:

Employee's Share = Gross Salary x 1.75/100

Employer's Share = Gross Salary x 4.75/100

Total ESI contribution = Employee's Share + Employer's Share

Note: Gross Salary = All the monthly cash components (Inclusive of incentives).

Should you need any further clarification, don't hesitate to ask.

Amit Goyal

Hi Soma,

Shish and Amit are correct. Earlier, the ceiling for ESI contribution was Rs. 7500/- of gross salary, but now it is Rs. 10000/- of gross salary. The employee contribution is 1.75% of the gross salary, whereas the employer's contribution is 4.75% of the gross salary. The total contribution is 1.75% + 4.75% = 6.5%.

I hope it is clear to you now.

Regards,
Amit Seth

Hi,

ESIC is applicable for employees whose monthly salary is below 10k. In this, the employee's contribution will be 1.75%, and the employer's will be 4.75%, making a total of 6.5% from the gross salary. Cheques have to be drawn in favor of the State Bank of India ESI account every month before the 15th.

Regards,
Sowmya

Hi all,

Do we have to calculate ESIC separately for both gross salary and incentives, i.e., 1.75% employee contribution and 4.75% employer contribution? Because if we consider incentives (which can be variable) to be a part of the gross salary as mentioned by Mr. Amit Goyal, then the salary might vary on a monthly basis and become more than 10,000 per month.

Please suggest. Thanks.

Also, in case ESIC is deducted for one month and the salary is appraised above 10,000 per month, ESIC would continue to be deducted for six months.

Regards,
D

Hi,

In case the ESI contribution is paid for the first month of the contribution period and it crosses the limit of Rs 10,000, the said employee will remain covered under ESI for the complete 6 months. So what companies that pay variable incentives do is keep a part of the incentive with them and pay it on a quarterly basis to the employees as quarterly incentive, which does not attract ESI. This exercise is done just to keep employees' salary below Rs 10,000.

Amit Goyal

Hi,

In case the ESI contribution is paid for the first month of the contribution period and it crosses the limit of Rs 10,000, the said employee will remain covered under ESI for the complete 6 months. Companies that pay variable incentives often keep a part of the incentive and pay it on a quarterly basis to the employees as a quarterly incentive, which does not attract ESI. This practice is done to keep employees' salaries below Rs 10,000.

Amit Goyal

Hi Dhruv,

I forgot to clarify one of your doubts. No, ESI is not calculated separately for incentives. It is calculated all together for salary and incentives.

Amit Goyal

Thanks a ton, Amit.

What we do is consider Gross Salary & incentives as two different components and contribute towards ESIC on both these components separately.

Regards,
D

Dear Mr. PBSKUMAR,

Could you please tell me on which date you had posted your topic 'ESI Return made easy'?

If you let me know the date, it would be easier to find your topic.

Regards,
Soma

Hey Hi!

The information on ESIC is very helpful. The formula to calculate ESIC is mentioned, but can you please give an example with a gross salary of 10,000/-. This will make it easier to understand.

Thanks,
Gloria