Struggling with ESI Calculation for an 8000 CTC? Let's Break It Down Together

Hi,

Can anybody help me with how to calculate ESI if CTC is 8000/-? I know the percentages of the employer & employee contributions towards ESI are 4.75% & 1.75% respectively, but I am not able to calculate ESI. Could anybody show me the calculation method?

Waiting for your quick response.

Thanks,
Soma

Dear Somu,

Please let me know whether the CTC is Rs. 8,000/- or if the gross salary is that amount. If the gross salary is Rs. 8,000/-, the calculation follows:
8000 * 4.75% = Rs. 380/-
8000 * 1.75% = Rs. 140/-

Hope you understand.

Regards,
Lakshmi

The total ESI is 6.5%, i.e., 4.75% from the employer and 1.75% from the employee. So, for 6.5% of 8000, it will be around 480 to 500. Now you can break up this amount as per the percentage for the employer and employee. Hope this clarifies.

Dear Friend,

ESI is not calculated on the CTC. ESI is calculated on employees' gross salary, which also includes incentives, NFH (National Festival Holidays), and other allowances. Both the employer (4.75%) and the employee (1.75%) must contribute to ESI Pay based on the employee's gross salary.

Regards, ac_prabha

Hi Soma,

Please see my earlier topic "ESI Return Made Easy" in this group.

Regards,
PBS KUMAR

Hi Soma,

It is really a tough exercise; even I faced the same problem in my company. But there is a way to solve it. First, you need to calculate the gross salary of the employee, i.e., CTC minus PF and ESI. But here, we want to calculate ESI itself so do one thing, apply this formula: (CTC - PF) * 4.75 / 104.75. And here I am attaching a CTC for 8000/-. It can help you. This time I am not able to give you detailed guidance, but if you don't understand the calculation, I will give the details.

Regards,
Shweta

Dear Shweta,

First, I must clarify that E.S.I. calculation is always based on Gross Salary rather than C.T.C. To determine the gross salary, you need to deduct ESI and PF (Employer's share) from C.T.C or any other such component that is not part of the routine salary, such as a bonus, etc. After that, you can proceed with the calculation for E.S.I.

If you have any doubts, please let me know.

Regards,
Ashutosh Verma

Hi,

Please clarify for me the difference between gross salary and CTC. I know that CTC is the total cost which a company bears for its employees, and Gross equals CTC minus the benefits given by the company. Am I correct?

Hi Soma,
Please find………
C T C includes Employers contribution to PF and ESI
Gross Salary = C T C - Employers contribution to PF

Net Take Home Salary = Gross Salary – Statutory Deductions (PF, ESI, PT,
Mediclaim, Food, Transportation etc etc)
EX: C T C = 8000/-
Gross Salary = 8000 – 12% on PF (Basic+ DA) – ESI 4.75%
=8000-384-362
=7254/-
Net Take Home Salary =7254-12% PF-ESI 1.75%-PT
=7254-384-133-60
=6657/-
Warm Regards,
MANIKSING

Hi,

First, calculate the gross salary and then deduct 4.75% and 1.75% of it for ESI contributions.

Regards,
Abhay

Dear Shweta,

Thank you so much! You solved my problem. Now, with the help of your ESI formula, I'm easily able to calculate ESI.

Keep posting...

Thanks once again,
Soma :)

Dear Sir,

Thank you for your response. I have already checked the link, but I have not found the attachment in the Excel sheet regarding the EPF and ESI return forms. Kindly send the same if you have these types of files.

Basudeva Choudhury
New Delhi

Dear All,

I need to know just one thing in the Excel sheet attached by Shweta for CTC Calculation. Do we deduct the employer's contribution of PF from our CTC only? And why is it called the employer's contribution at all?

Regards,
Remya

Dear Soma,

Kindly refer to the ESI Act on the website and keep it for your reference. In the ESI Act, ESI will be calculated on the gross amount paid by the employer to the employee (not on the CTC calculated by the employer).

Basudeva Choudhury
New Delhi
Mobile no. 9891430567

Dear Soma,

ESI contribution is payable on gross salary up to Rs. 10,000/- per month. For contribution, only gross salary is considered, not the CTC.

In your case, the gross salary is Rs. 4941. Therefore, the employee contribution will be (1.75*4941/100) = 86.47, rounded up to 87. The employer contribution will be (4.75*4941/100) = 234.70, rounded up to 235.

Thanks,

Amit Kumar Tawar

Lakshmi,

If the employee resigns without filling up the EPF and ESI forms, what should we do? How do we close their account?

Dear sirs,

I am a fresh graduate and I have attended an interview where they asked me about PF calculation and ESI calculation. However, I actually don't know the salary calculations, deductions, and their returns. Please help me in this regard. Kindly send me calculation methods with an example.

Gururaju Acharya
Hyderabad

Can I know if we have to deduct only the employee's contribution or both the employer's as well? Kindly provide the process.

Hi, I am new to payroll. I have a little problem with reimbursement configuration. Can anyone please tell me how to calculate reimbursements and the items included in it? Also, what are the claim procedures?

Arunraj
Bangalore

Dear GTM,

I have my own firm, namely SNP Info Tech. I am paying Rs. 5000/- to my employees. The total strength is 11 employees. Am I supposed to pay ESI?

Please reply to me soon.

Thanks & Regards,
Alpa Patel

ESI Applicability Based on Gross Salary

ESI is applicable only if your gross salary is below $15,000. If it's more, ESI is not applicable.

Regards,
Derek Gomes

ESIC Calculation Formula

- Gross salary - Attendance allowance (if any) * 4.75% Employer's contribution
- Gross salary - Attendance allowance (if any) * 1.75% Employee contribution

ESIC calculation depends on whichever component is included in the employee's monthly salary. This includes Basic pay, HRA, Personal Pay, Statutory Bonus (if paid monthly), Conveyance Allowance, Medical Allowance, Meal allowance, Travel Allowance, Vehicle Allowance, and any other component included in the monthly salary.

For more information, please send an email to [Email Removed For Privacy Reasons]. An XL file is attached.

Thank you.

How can we avoid differences between ESIC manual calculation and system-generated challan amounts? Please check if the employee count is more than 50.

Regards,
Kaushal

Hi, please let me know in what cases we have ESI. As per my understanding, any establishment or factory that has more than 20 employees, and any employee whose take-home salary is less than ₹15,000, needs to calculate ESI.

I had a question on this attachment. Why is the employer's part of the contribution to ESI and PF being deducted from the 8000, which is the gross salary of our candidate?

When we are calculating the ESIC on Gross salary, we are exempting the Medical Allowance. Therefore, is it necessary to exempt the House Rent Allowance as well? Please confirm with me.

Regards,
D.BABI

Salary Sheet for EPF, ESI, and PT Calculation

Friends, this is the salary sheet for EPF, ESI, and PT calculation. For EPF, amounts above Rs. 6500 will be calculated based on Rs. 6500 only. ESIC will be calculated only for salaries below Rs. 15000. If the gross salary is Rs. 15000 and the employee has worked for 10 or 20 days, ESIC will not be calculated for those days. PT will be calculated based on the gross salary. I have marked EPF, ESIC, and PT in green color, and the days with less work in yellow. ESIC is not calculated because its slab is Rs. 15000/-.

Kindly go through the attached document for your information.

Thank you.

CTC Calculation Document

This is the calculation of CTC. You can go through the attached document.

Regards,

ESIC Salary Components Inquiry

Please kindly confirm which salary heads should be included in the ESIC salary. The components are as follows:
- LTA (Leave Travel Allowance)
- Personal Allowance
- Variable Allowance
- Night Allowance

Additionally, please advise on which allowances should be omitted during the calculation of the ESIC salary.

Thank you,

Regards,
Vishal

Kindly explain why this formula is being used. Do you have any valid records for this? What does 104.75 represent? Please help me out with this doubt: (CTC-PF)*4.75/104.75.

Regards,
Ahakila

Hi, my name is Amith. I want to build my career in HR. I am trying to learn about ESI and PF calculations. Please help me with this so I can apply it in my current company. I also have an offer from another company. My email: [Email Removed For Privacy Reasons] Phone: [Phone Number Removed For Privacy Reasons]

Regards,
Amith

Hello All,

Can anybody help me in calculating Rs 18,000 salary per month, both in CTC and Gross?

Regards,
Raj

Hi,

Can anybody help me with how to calculate ESI if CTC is 7400/-? I know the % of Employer & Employee contribution towards ESI is 4.75% & 1.75% respectively, but I am not able to calculate ESI.

Can anybody show me the calculation method?

Waiting for your quick response.

Thanks,
DHARMENDRA
sk9006229@gmail.com

(CTC-PF)*4.75/104.75

Why do we divide by 104.75? Please explain. I think it should be (CTC-PF)*4.75/100 because it's 4.75%.

Can someone please clarify while calculating the gross salary for ESI, do the variable components of the salary like reimbursements, overtime payment, etc., need to be included or not? If yes, then included many times, the individual may go beyond 21k. How to go about for such individuals? To get benefits of ESI, it's not mandatory to have the ESI deducted every month.

Hello Everyone,

First time I am posting my queries related to ESIC. I am working in the manufacturing industry, and we have followed all ESIC rules and regulations. However, recently, we have been facing an ESIC inspection audit. My query is if an employee's salary is above 21k, but due to some reason in April, they earned less than 21k in gross salary, is there any rule to calculate ESIC for this April earned salary? Does this calculation continue for the period up to September? Please suggest and guide.

Hi Sir,

Last month, our employee received a gross salary of Rs. 21,000, and starting from this month, he is receiving Rs. 24,000. Could you please advise me on how to handle ESI returns for this employee for the current month? Specifically, I would like to know how to exclude him from the ESI returns.

Thank you.