ESIC and EPF Contributions: Should Deductions Start from Coverage Date or Full Month?

Coverage Date for ESIC and EPF Contributions

For a newly covered establishment under ESIC and EPF, deductions and payment of contributions should be made from the date of coverage or for the full month in which the date of coverage falls.

For example, if a company gets coverage with effect from the 12th of October, the company has to make deductions and payment of contributions on the wages with effect from the 12th of October or for the full month of October.

Calculation of Days for Coverage

Will the number of days performed be calculated from the 12th of October (date of coverage) or from the 1st of October?

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Contribution for Newly Covered Establishments

Part of the month cannot be excluded, so the contribution is payable for the full month.

Is there any notification available?

Date of coverage is 12th October, which means 1 to 11 October the establishment was not covered. Is the establishment required to pay contributions for the part of the month for which it was not covered under ESI?

Contribution Period and Payment

The contribution period is monthly, and the establishment got covered in the month of October. Hence, the October contribution is due and payable in November. There is no provision or rule to bifurcate the pre-registration payment as non-contribution. In other words, the gross wages payable in the month of registration are subject to contribution.

Notwithstanding the date of coverage

The number of days the employees worked will be considered for contribution at actuals in the wage month.