Understanding ESI Deductions: Does a Salary Increase Affect Your Contributions?

Hello, everyone, I want to know if a person, X, has a gross salary of ₹10,000/-, is he liable for ESI deduction? After 6 months, if his salary increases to ₹18,000/-, does he still have to pay ESI, considering it was deducted previously? Please let me know.

Hello, Guys, I want to know if a person, X, has a gross salary of ₹10,000/-, then is he liable for ESI Deduction? After 6 months, if his salary is increased to ₹18,000/-, does he still have to pay ESI, considering it was deducted previously? Please let me know.

ESI Deduction Eligibility

Right now, ESIC is applicable to those with a Gross Salary of up to ₹15,000.00 per month. After crossing the coverage amount of ₹15,000.00 per month, that person will be barred by ESIC and not liable for ESI deduction thereafter.

Employee State Insurance Corporation:

In ESIC, 1.75% of the gross salary is deducted from the employee, and the employer provides 4.75% on the gross to the employee's ESIC account, making a total contribution of 6.5% liable to the employee. ESIC is not deductible on washing allowance. The ceiling limit is 15,000 (gross). ESIC is not applicable for those who receive a gross salary of 15,001 or more.

Please disregard any mistakes found.

Warm regards

[QUOTE=Pratap Kumar; 1644865] Up to 10,000 candidates will be eligible for ESI; in case of 10,001, he does not come under ESI.

Dear Pratap, Now, the ceiling has been raised from Rs. 10,000 to Rs. 15,000. So, any amount from Rs. 15,001 and above will be exempted from ESI deduction.

I am enclosing the ESI Act, Rules, and Regulations for your reference and records. I hope it will be useful for all.

Regards.

Let me know, sir, if the salary of X person is $14,000 for the month of August, and the employer paid a bonus to him in the month of September. In that case, the salary jumps to $16,000. How do we calculate the ESI, i.e., 1.75%, on which amount?

ESIC Contribution and Benefit Periods

ESIC has two contribution periods and corresponding benefit periods:

1. Contribution period - April to September - Benefit period January to June.
2. Contribution period - October to March - Benefit period July to December.

If the salary of any employee is revised by more than Rs. 15,000 in the middle (say May) of any contribution period, then in such cases, ESIC deduction will continue until the end of the contribution period, i.e., September, and will stop from October onwards. ESIC is not deducted on bonuses.

Regards,
J N Varpe