Confused About ESI Contribution Changes? Let's Discuss the Paysheet and Challan Discrepancy

ESI Employee & Employer Contributions Update

ESI Employee & Employer contributions have been reduced from 6.5% to 4% effective from 1st July 2019. We will close the attendance for the July 2019 paysheet from 26th June to 25th July. Accordingly, the reduced contributions are to be deducted as follows:

1. From 26th June to 30th June, Employee & Employer Contributions are to be recovered at 1.75% & 4.75%.
2. From 1st July to 25th July, Employee & Employer Contributions are to be recovered at 0.75% & 3.25%.

While uploading the challan for the month of July, the ESI portal automatically calculates the contributions for Employee and Employer as 0.75% and 3.25%, respectively. However, there is a discrepancy between the deductions on our paysheet and the generated challans. Please advise.

Hi,

What you have understood is totally wrong. What you have deduced is a complete mistake. Whatever method you may follow for attendance in payroll, whether it is from the 26th to the 25th or from the 1st to the end, in ESI it will be considered as the month of July. If you couldn't upload it in ESI, the postal service will not accept it. You will need to reverse your payroll.

Regards,
P. Packiaraj

Hi,

The salary cut-off date is determined by your internal policy. Revised ESI contribution changes are applicable with effect from 1st July 2019.

Thank you.