ESI Salary Revision: Can We Delay Deductions Until September?

If an ESI-covered employee's salary was revised effective from May 1st, for example, to $25,000, is it possible to provide an exemption so that ESI is not deducted from the May salary, but instead deduct the ESI amount from May to September salaries?

There are no exemption provisions under the ESI Act, 1948, through which any employee can be granted exemption for any specific month. The ESI wage limit currently stands at up to and including Rs. 15,000 per month.

In the contribution period, i.e., April to September and October to March, ESI deduction cannot be changed. You have to deduct ESI up to September month in this particular case.

Once you register under the ESIC, you can't opt-out, even if you don't have eligible staff for ESIC. In that case, you have to submit NIL returns to the authority.

Secondly, revisions to salary should not affect the contribution period. Any revision should be effective post the end of the respective contribution period only.

Regards,
Tushar Swar

Could you please confirm whether the ESIC salary ceiling has been revised from ₹15,000 to ₹25,000? Has there been any notification issued by the government? If so, please share the same.

Regards,
SUNIL P. CHOUGHULE