How to Handle ESIC Contributions for Employees Earning Above the 15,000 Limit?

Hi all, ESIC Max amount is 15,000, but my query is if the employee is getting a salary of 20,000 including all the OT amounts, how do we pay ESIC?

Attribution: https://www.citehr.com/489148-paid-b...#ixzz2xugcupQa

If the Gross Rate Salary of an employee is less than or equal to 15K, then they are eligible for the ESIC, and the ESIC Contribution must be deducted from the Total Earnings of that particular employee, regardless of whether their Total Earnings exceed the ESIC Limit. We have to deduct the ESIC contribution from Total Earnings. The Total Earnings will consist of all the Allowances paid to the Employee as mentioned in the Salary Slip.

Regards,
Santosh Bhuvad
[Email Removed For Privacy Reasons]

Employee Salary Breakdown

Employee Basic is 9000. HRA is 3600. Other Allowance is 2400. Total Gross is 15000.

Overtime Earnings

In the month of January, he did overtime and earned an additional 3000, making his total earnings for that particular month 18000. Now, my question is how much will be deducted from this amount and contributed?

Deductions and Contributions

When it comes to the 15000 total, the deduction is 262 from the employee and 712 from the employer. But when the total is 18000, how much do we deduct?

ESI Contribution on Overtime Wages

ESI contribution is payable for overtime wages as well if the employee's salary, excluding overtime, is up to or less than Rs 15,000 per month.

Regards,
Varghese Mathew

I presume the employee is already registered under ESIC. In this case, you need to pay ESIC on ₹18,000. The Employee Contribution is ₹18,000 * 1.75%, and the Employer Contribution is ₹18,000 * 4.75%.

Hope this helps.

Warm regards,
Deena Jagasia

Even if the employee's salary exceeds Rs. 15,000, as long as the employee is within the contribution period, they will continue to pay their contribution towards ESI until the contribution period concludes.

Trust this clarifies your query.

Thanks,
R. K. Nair