Salary Increase to Rs 11,000: Does My Colleague Still Need to Pay ESI Contributions?

Dear Sir,

My colleague was drawing a salary of Rs 9500.00 until Oct'2007. Both he and the management were contributing to ESI. His salary has been raised to Rs 11000. Does he need to pay the contributions from November'2007 onwards?

Regards,
Rajanna V N

Hi,

ESIC is contributed as per the contribution period, i.e., April to September and October to March. Since your friend was paid a salary in October amounting to Rs. 9500.00 (which is under the ESIC limit and received an increment in November 2007), they will have to pay contributions until March 2008. Contributions should stop from April 2008 onwards. If the salary had been raised from October 2007, the contributions would have stopped since it was the beginning of the contribution period.

Regards,
Harshad

Hi,

My colleague was drawing a salary of Rs 9800.00 until July-09. His increment was done in August. Is he eligible for the ESIC deduction after the increment until the August-09 payout?

Before Gross: 9800
After Gross: 11200

If the company pays the 4-month arrears (April-July), can he still be eligible for the ESIC deduction?

Thank you.

Dear sir,

As per the ESI Act of 1948, individuals whose gross salary is less than 10000 are eligible for ESI benefits. If the gross salary exceeds 10000, those individuals are not eligible for ESI benefits. If your colleague is drawing a gross salary of more than 10000, there is no need to pay ESI contributions as per the ESI Act of 1948.

Dear All,

According to the ESI Act of 1948, even if the gross salary exceeds 10,000 rupees and an individual is in any contribution period, both the employee and the employer must contribute until the end of that contribution period. This deduction has arisen as a result of a legal case and can be referenced in legal literature.

Hence, contributions are mandatory, and the individual will be eligible for the corresponding contributory benefit period.

Regards,
AS