ESI Eligibility Salary Limit

How ESI eligibility salary limit is calculated, which is below Rs.15000. Only gross is calculated or gross plus other incentives which the employee earn such as night shifts & over time are calculated.

Dear Mr.Rajeshwar
To determine the employee for coverage his or her total salary is taken into account , if the salary or wage is Rs.15000 or less then he or she will be brought under coverage. Incentive which is not variable will be taken into account for calculation of ESI Contribution.

Thanks for the reply. I have one more question, is it mandatory for a Pvt Ltd company to provide ESI insurance to employees below 15000 wage limit. Earlier my company used to provide ESI facility but from April 2013 gave a new salary structure with no ESI deduction. Kindly respond.

Dear Mr. Rajeshwar,
Firstly you have to see the applicability of the ESI Act to the Pvt Ltd company.The ESI Scheme is extended to factories using power and employing 10 or more persons and to non-power using manufacturing units and establishments employing 20 or more person and drawing wages/salary upto Rs.15,000/- per month.
Though you have not elaborated the reasons for debarring the employees of your company from ESI facility from April 2013.I can only guess that probably ESI deduction has been stopped because all employees must have crossed the wages/salary limit of Rs.15,000/- per month due to the change in salary structure.
BS Kalsi
Member since Aug 2011

Dear Rajesh,
ESI eligibility is seen in the beginning of every contributory period. If he is then he continues to be for the whole contributory period even though his salary crosses the limit later.
Now for calculation purpose,
- The total gross would be considered plus
- Any earnings (might be incentive) which is paid at an interval not exceeding 2 months.
If your incentive is paid monthly then yes it has to be calculated and if paid once in 3 months then no.

Dear Sir
Irrespective of the status of the company ( partnership or Private ) ESI is applicable where you engage 10 or more workers. Given to understand that your company has revised the salary structure, if the salary structured in such a way that employees are getting more than 15000 rupees then you are not liable to pay the ESI contributions and the same salary revision was done after April then you are supposed to deduct ESI upto Septemeber 2013.
regards
C Manimaran
8489901606