Re: Esic: Calculation & Contribution...! - PDF Download

Hi Bhavna,

Yes, you need to take the incentives into account because, according to me, ESI is always calculated based on the total earnings. You need to deduct ESI until the completion of the ongoing 6-month period.

Members, please correct me if I am wrong.

Regards,
Amith R.

Hi All,

I have a few queries related to ESIC calculation. I am citing a case to explain the situation and understand the solutions well. An employee is at a gross salary of ₹8000 and is thus liable for ESIC deduction. During the year, he receives an incentive worth Rs. 1,500 and after a few months, an increment of Rs. 4,000. Now his gross salary becomes Rs. 12,000.

Following are the queries:
1. While calculating ESIC deduction, will incentives be considered?
2. After the increment, though he is not eligible for ESIC deduction, but as the 6-monthly contribution has to go on, the deduction will be calculated on which amount... ₹8,000, ₹10,000, or ₹12,000?

Please help.

Regards,
Bhavna

Hi,

The employer and employee should contribute towards ESIC at Rs. 12,000. For more information on ESIC and what constitutes wages, please read the attached file.

Warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)

Hi Bhavana,

The incentive amount has to be included in the gross earnings for ESI calculations. Even though the gross income crosses the ceiling of Rs. 10,000, the ESI should be deducted until the end of the contribution period for the gross earnings.

Members, please tell me if I am wrong.

Warm regards,
Satyakumar

Hi,

The simple answer to your query is that the amount on which he was receiving the contribution should be the only amount considered. If you consider the entire amount, it may appear that you are not adhering to the law. Therefore, only the previous amount on which he was receiving the contribution should be taken into account.

I apologize if I am mistaken, but I believe I am right to the best of my knowledge.

Amar Chauhan

Hi Bhavna,

Even after the increment, you need to calculate ESI on the total earnings only. It doesn't change, and as I mentioned in my earlier post, you need to do it until the completion of the ongoing 6-month period. I hope it is clear now.

Umesh, thanks a lot for the very informative content. Keep posting.

Regards,
Amith R.

Hi,

My salary increased by 16000 in July 2016. Now, the ESIC wage limit has been raised to 21000. Am I eligible for ESIC maternity benefits in December 2016?

Hi,

My delivery date is in December 2016. I have 9 years of experience in my institution. During which contribution period should I check for the benefit period?

Thank you.