Esic Coverage - Pdf Download

Dear All,
Please confirm about meaning of "wages" under ESIC Act.
On which amount we have to deduct ESI Contribution ? Is it Gross Salary or Basic Salary ??
Thanks,
Navin Ch. Joshi

you have to deduct esi from gross salary . 1.75% from employee and 4.75% is employer contribution

As per the provisions of the ESI Act,
Under Section 2(12) The Act is applicable to the factories employing 10 or more persons irrespective of whether power is used in the process of manufacturing or not.
Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.
Further, u/s 1(5) of the Act, the Scheme has been extended to Private Medical and Educational Institutions employing 20 or more persons in certain States .
The State Govt. has been requested to issue notification under Section 1(5) on the lines of Section 2(12) keeping the threshold limit for coverage as 10 employees instead of 20.
The existing wage-limit for coverage under the Act, is Rs.15,000/- per month (with effect from 01.05.2010).

Friends
Thanks for all the write-up and replies on the topic on ESIC. However
I would like to know specifically the following under ESIC:
Do the following gets covered under "Wages" as defined under ESIC Act :
A. LTA ie., Leave Travel Allowance" ( a benefit given once a year which is also subject to exemption under Income Tax provision );
B. Leave encashment - this could be taken more than once subject to available leave to one's account - normally it is also availed once a year ;
C. Performance Incentive - paid once a year based solely on one's performance during a previous year ;
D. Amount paid every month and termed as "Travelling Allowance" forming part of one's payslip as one component of monthly salary.
Regards
Kohinoor Mirra

Hi,
Any payments made on yearly basis or at an interval of more than 2 months doesn't attract ESIC contributions.
Apply this base rule to get answer on your query.
Please note thet reimbursements doesn't attract ESIC contribution but allowances do.
e.g. Reimbursements for expenses incurred on Newspaper/Periodicals doesn't attract ESIC contribution but salary component named Newspaper Allowance paid on monthly basis will attract ESIC contribution.
Regards
Amitava Majumder

Dear Kmitra,
Amitava Majumder has addressed your query in a better way still for your specific query:
A. LTA ie., Leave Travel Allowance" - NO
B. Leave encashment - NO
C. Performance Incentive - NO
D. "Travelling Allowance" - YES
regards,
Kamal P

ESIC Contribution is deducted on number of days worked in that month.
eg. if an emplyoee has taken leaves for 2 days in month of Janauray 2011
then esi contribution calcuation will be on 31-2=29days*per day salary.
please let me know if you need any more information

Dear Rajendra,

ESIC is not applicable on construction industry just see the following attachments for your reference.
Thanks & Regards
Sunil Sharma
V3S Group

it was a circular way back in year 1999, but recently jan 2011 itself there is circular from HO ESIC to all directors/SRO/BRO that now the construction site worker will covered under ESIC.

Dear ranjeeta27
ESIC is deducted and contributed on the number of days paid and not on the number of days worked/present.
regards,
Kamal