Is My Employer Overcharging ESI Deductions? How to Address a 6% Deduction Issue

I am an employee in an education-based organization. My monthly salary is ₹15,000. My employer deducted ₹944 from my salary as ESI. Upon my research, it showed that they can deduct only 1.75% from my salary. However, they have deducted the entire 6% from my salary. Can they do this? Can I ask them to stop deducting that much?

You have provided very little information about your employment. Yet, as per standard, I can share my view on this matter.

You might have joined the company recently, and the offered salary would have been in CTC (Cost to Company). If your salary is in CTC, then both the share of ESIC (PF and LWF contribution as well) contributions, i.e., 1.75% and 4.75%, will be deducted from the offered salary. Rest can be suggested after knowing the exact details of your employment.

Dear Friend,

ESI Deduction is as follows:

Employee share at 1.75% on the Gross Salary Earned.
Employer share at 4.75% on the Gross Salary Earned.
Total Share at 6.5%.

Please ask your Employer to restrict the Employee share to 1.75%. Alternatively, log in to the ESI IP PORTAL with your ESI Insurance number and find out the details of Contributions remitted. Please upload your Pay Slip for more clarity.

Dear friend,

Based on the information provided by you, I assume Rs. 15k is your total CTC per month. Total CTC is the sum of your earnings and the contribution amount made by the employer towards retirements and benefit schemes like PF, group insurance, gratuity, etc. Hence, the employer's contribution of ESI and PF will form a part of the total CTC.

Hope this clarifies your doubt.

Regards,
Rahul

Hi,

Yes, you may ask the employer not to deduct more than 1.75% of your gross salary as of now. But make sure that the amount is calculated properly. You may even ask the employer to reimburse the excess amount deducted from your salary if this has been done in the past too.

Thanks and Regards