How Does ESI Contribution Work When Overtime Pushes Your Salary Over the Limit?

Actually, my monthly CTC is less than the ESI statutory gross of 21,000. Due to overtime (OT), my April salary goes beyond 21,000. So, the employer didn't deduct any ESI for the first contribution period. Do I need to contribute ESI in the second contribution period as my actual monthly gross will be less than 21,000 in October (if there is no OT for October month).

If your gross salary is equivalent to or less than 21,000 rupees, you are bound to be covered under the ESI scheme.

"Overtime allowances will be considered as wages for the purpose of charging the contribution only and will not be considered for the purpose of the coverage of the employee under the Scheme. The same view was held by the Supreme Court in its judgment delivered on 6.11.96 in the case of Indian Drugs & Pharmaceuticals Ltd. Vs. ESIC, in Civil Appeal No. 2777 of 1980."

So, even if you are paid a salary/wages more than 21,000, you are to be covered, and there is no exception in this case. Your contribution will be on the wages plus the overtime allowances.

Thanks and Regards

Okay @umakanthan53,
But other than overtime allowances, due to any other circumstances, my monthly gross at the start of the first contribution period exceeds 21000. However, at the beginning of the second contribution period, the monthly gross is <=21000. Do I need to contribute to ESI regardless of the first contribution period?