Confused About ESIC Eligibility for a Rs. 21,000 Gross Salary? Let's Clarify the Calculation Methods

Confusion about ESIC Calculation for a Gross Salary of Rs. 21,000

I am really confused about the calculation of a Rs. 21,000 gross salary for ESIC. Suppose I have a CTC of Rs. 280,000, which includes a PF employer share of Rs. 20,160 (Rs. 1,680 per month), making my gross salary Rs. 259,840 (Rs. 21,653 per month). My understanding is that to determine ESIC coverage, if (CTC - PF employer) is less than Rs. 21,000 per month, the person is eligible for ESIC.

Alternative Calculation Method for ESIC Eligibility

Another suggestion I have received is that if my CTC is Rs. 280,000, the PF employer contribution is Rs. 20,160, and the ESIC employer share is Rs. 11,782 (4.75% of gross), then my gross salary decreases to Rs. 248,052 (Rs. 20,671 per month). Since my gross, after considering the employer share of ESIC, is below Rs. 21,000, I would need to be registered under ESIC.

I would appreciate clarification on which method of calculation is correct. Thank you!

ESI is on gross without considering ESI contribution. Your first calculation is the right one.

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ESI is calculated based on the gross salary without taking into account the ESI contribution. It seems that your initial calculation is correct.

ESIC always calculates based on your gross earnings, which is 21,000/-. Therefore, for employees whose gross earnings are under 21,000/-, you have to deduct ESIC.