ESI Calculation Confusion: Should I Deduct ESI for Reduced Salary This Month?

Dear All,

I have a question regarding ESI calculation! Suppose the gross salary of someone is 20000/-. He does not come under the ESI slab. In any month, his attendance is for 5 paydays. His salary for that month is 3333.33. Now, should I deduct ESI from his salary?

Need a quick reply.

Regards,
Sanjeev

Dear Sanjeev,

Taking into consideration the coverage of ESI, it applies to the gross salary only and excludes the washing allowance. If an employee is receiving a salary below 15000/- based on the working days, there is no need to deduct the ESI contribution.

Regards,

P. Satya Reddi

Dear Sanjeev,

No, you do not need to deduct ESI while calculating his total gross salary. You should not consider any conveyance/travelling allowance, washing allowance, or any other allowance paid to defray the nature of his work. Only during plant closure, if productivity allowance comes down, then based on this, you need to proceed with ESI deductions.

Regards,
Pavan

Dear All,

If any employee's gross salary is 15000/- PM and above, no ESI deduction is applicable, whether it's for one day, two days, three days, or the full month's salary. This is because we calculate the paid days based on gross heads. Additionally, ESI returns are filed twice a year from April to Sept and Oct to Mar. If an employee's gross salary is below 15000/- PM in April and ESI contributions are deducted, but in May, the salary increases, resulting in the employee's gross salary being above 15000/- PM, then the ESI contributions for this employee will continue until September. This is mandatory as per the ESI act.

Regards,

Sukhpal
9891307304

Once an employee is out of the preview of ESI, whether he is present for a day or 30 days is immaterial, unless his gross salary per month is reduced and falls under Rs. 15,000/-.

Ravindra Watve

You do not need to deduct ESI contributions as his salary exceeds the ceiling amount of Rs. 15,000/-

Dear Sanjeev,

The ESI is not deductible as the gross salary is more than Rs. 15,000/- pm. A person getting Rs. 3333.33 as take-home salary does not mean that his gross salary is reduced; his gross salary remains Rs. 20,000/-, but due to his absences or other deductions, the take-home salary comes to Rs. 3333.33.

Therefore, ESI is not deductible.

Rajesh Narwal

Try to have control over his actual CTC rather than the earned CTC. For example, if the actual CTC is Rs. 20,000 and the earned CTC is Rs. 5,000, you should maintain control over the actual amount.

For instance, if the gross amount is greater than Rs. 15,000, then (0, gross*1.75%) i.e., if the actual gross amount crosses Rs. 15,000, he will not be included in ESI with this formula.

Regards,
Selva

Control Over CTC for ESI Calculation

Try to set control over his actual CTC, rather than his earned CTC. For example, if the actual CTC is Rs. 20,000 and the earned CTC is Rs. 5,000, you should have control over his actual CTC.

Like:
if (gross > 15,000, 0, gross * 1.75%)

i.e., if the actual gross crosses 15,000, he will not be under ESI with this formula.

Regards,
Selva

Can you provide me with the latest ESI calculation and its limit on gross salary? An immediate response is required.

Dear friends,

I have a doubt about ESI contribution. Both my husband and I work for the same company, where our gross pay is below 15000/-.

My question is: I am dependent on my husband, and he is dependent on me. Why should we both have to pay the contribution? Is there any rule that states one payment is sufficient for ESI coverage for the entire family, including dependents?

Please clarify for me.

No need to deduct ESIC because his salary gets decreased due to his attendance, not because of a change in his salary.

Regards,
P K Mishra

Irrespective of his days present, he shall continue to be out of ESI only. Once anybody is drawing over and above Rs. 16,000/- per month (except interim revisions), he shall not be treated as an insured person.

Regards,
RANGA RAJU