Confused About ESI Deduction Limits? Seeking Advice on Salary Revisions for Employees

Hi all,

Please provide information on the limit of salary for ESI deduction in my company. Currently, we are exempting ESI for employees earning above 10,000 Rs, i.e., 10,001 onwards (CTC per month). However, a newly joined Accounts person has suggested deducting ESI for the same employees if their in-hand limit does not exceed 10K.

In this scenario, we would need to revise the salaries of many of our employees. Please advise.

In-hand salary will not be taken into consideration for ESI deduction; only payslip salary, i.e., gross salary, will be taken into consideration. There is no need to increase the limit.

The CTC may include employer's contribution to EPF, medical allowance (which may be paid quarterly), traveling allowance, and even gratuity payable at the time of discharge. This is not the salary for the purpose of the determination of ESI or EPF. Find out whether the salary without the above parts of CTC is more than Rs 10000. If yes, then only you are uncovered; otherwise, you are covered by ESI.

Regards, Madhu.T.K

Dear All,

I want to know to whom the ESI Act is applicable. As per the act, it states that if an employee's gross salary exceeds 10k, then ESI is not applicable. How about the companies? Our company has 45 employees, out of which less than 20 are drawing a gross salary of less than Rs. 10,000. In this case, are we supposed to register for ESI or not? I have heard that if an employee's gross salary exceeds more than 20 (who are drawing less than 10k), then we are supposed to register, or else we need not have to go for ESI. Please clarify the same.

Please let me know if you need further information or clarification. Thank you.

Under ESI, only establishments are covered regardless of the salary paid. If you employ 10 or more workers, your establishment falls under the ESI schemes. There may be employees who are not covered, even if they receive 10K, as long as the establishment is covered under the scheme.

Regards,
Madhu.T.K

Dear All,

I want to know to whom ESI Act is applicable. As per the act, it states that if an employee's gross salary exceeds 10k, then ESI is not applicable. How about the companies? Our company has 45 employees, out of which less than 20 are drawing a gross salary of less than Rs. 10,000. In this case, are we supposed to register for ESI or not? I have heard that if the employee's gross salary exceeds more than 20 (who are drawing less than 10k), then we are supposed to register; otherwise, we do not need to go for ESI. Please clarify the same.

ESI ACT APPLIES WHEN FOR ESTABLISHMENT EMPLOYING 20 OR MORE EMPLOYEES DRAWING LESS THAN 10K. IN CASE OF A FACTORY, 10 OR MORE EMPLOYEES DRAWING 10K.

Hiren Chheda
09821078457

Hello all,

The ESI ceiling limit has been revised from Rs. 7500/- to Rs. 10000/- with effect from 01.10.2006. The ESI will be exempted for those who are drawing a gross salary exceeding Rs. 10,000.

Best Regards,
V. Sathyanarayanan

Hi,

The ESI limit is 10k. If an employee is getting a salary of 10000 or more, ESI will not be deducted from his salary.

Sanjeev Kwatra

[IMG]https://www.citehr.com/misc.php?do=email_dev&email=c2FuamVldl9hYX Jlc3NAcmVkaWZmbWFpbC5jb20=[/IMG]

Hi,

ESI limit was less than or equal to ₹10,000 Gross. ESI calculates on Gross Salary, not on CTC.

With Regards, Vishnu

Dear Madhumita,

The main point to be clarified for you is that the Rs 10,000 limit is applicable on Gross and not on CTC. If the CTC is Rs 10,000, then the gross will certainly come down to below Rs 10,000, and in such a case, you need to deduct ESI. Hope it is clear for you now.

Regards,
Amith R.

Hi Colleagues,

My gross salary is $10,882. Still, ESI is getting deducted from it. Please let me know if there is any particular company policy because of which it is getting deducted. I have heard earlier (also as mentioned in your above posts) that ESI gets deducted only up to $10,000.

Please update me on this ASAP.

Regards,
Vaibhav

Hi Vaibhav,

If your gross monthly salary is above INR 10,000, you are not covered under ESI benefits. In your case, probably your salary might have been revised, which was less than INR 10,000 gross per month previously, and you were covered under ESI at that time. You can get this cleared from your HRD person who handles ESI.

-Saravana Rajan