Confused About ESI Calculation? Let's Figure Out Gross Salary Together

Dear Sir/Madam, I have gone through several postings and understood that ESI should be calculated on Gross salary. If I am not wrong, Gross salary = CTC - Employer PF Contribution - Employer ESI contribution. If we want to calculate Gross salary, we need to know the ESI Percentage, and for ESI calculation, we need to know Gross salary. So how can we arrive at a conclusion in the calculation? Kindly help me out on this.

Regards

Dear Sir/Madam, I have gone through several postings and understood that ESI should be calculated on Gross salary. If I am not wrong, Gross salary = CTC - Employer PF Contribution - Employer ESI contribution. If we want to calculate Gross salary, we need to know the ESI Percentage, and for ESI calculation, we need to know Gross salary. So how can we arrive at a conclusion in calculation? Kindly help me out on this.

ESI Contribution Calculation

The ESI Contribution for the Employer is 4.75%, and that of the Employee is 1.75% of Gross Salary. You have to make a reverse calculation, i.e., CTC - Employer PF Contribution = sum arrived to be divided by 1.0475. Whatever you get is the gross salary.

Hope that you got your query resolved.

Gross Salary vs. CTC

It is gross salary. But not CTC, which consists of the employer's share of PF, ESI, Gratuity, and other costs incurred by the employer for transport, food, etc.

Regards,
Varghese Mathew

Gross Salary for ESI Deductions

Gross salary for ESI deductions can be restricted to INR 15,000 per month, as this is the ceiling under the Act.