Dear Friends, I dont have much knowledge about ESI. I want to know that On which salary, Basic or gross, ESI count? And What % is to contribute?
From India, Vadodara
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7From India, Vadodara
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Dear Devansh,
ESIC is deducted from the gross salary per month. It is paid from both sides - by the employee and the employer. The employee contributes 1.75% of his/her gross salary, while the employer contributes 4.75% of the employee's gross salary. For ESIC coverage, the ceiling is a gross salary of 10,000/- per month.
Regards,
Amit Seth.
From India, Ahmadabad
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ESIC is deducted from the gross salary per month. It is paid from both sides - by the employee and the employer. The employee contributes 1.75% of his/her gross salary, while the employer contributes 4.75% of the employee's gross salary. For ESIC coverage, the ceiling is a gross salary of 10,000/- per month.
Regards,
Amit Seth.
From India, Ahmadabad
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Exactly.. but gross here will mean basic, DA and all allowances less washing allowance, if any.. correct? Cheers, Bala
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Gross means gross. It includes all (including DA, HRA, OTA etc). Please go through the ESI Act and Rules available in ESI web site. S. Krishnamoorthy
From United States, Roslindale
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From United States, Roslindale
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Hi Devang, ESI Deducted from the gross salary Employee Contribution - 1.75% Employer contribution - 4.75%
From India, Mumbai
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From India, Mumbai
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Hi,
ESI has to be deducted on the gross amount. Employee contribution is 1.75% of the gross amount, and employer contribution is 4.75% of the gross amount. You need to submit the ESI challans by the 21st of every month in a nationalized bank.
Regards,
Usha
From India, Hyderabad
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ESI has to be deducted on the gross amount. Employee contribution is 1.75% of the gross amount, and employer contribution is 4.75% of the gross amount. You need to submit the ESI challans by the 21st of every month in a nationalized bank.
Regards,
Usha
From India, Hyderabad
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ESI: Employees’ State Insurance Act, 1948
Calculations: ESI will be calculated from Gross salary
Basic
DA
HRA
and other Allowances
Employee: 1.75%
Employer: 4.75%
Coverage: All the employees Drawing wages up to Rs.10, 000/- per month engaged either directly or thru’ contractor.
From India, Madras
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Calculations: ESI will be calculated from Gross salary
Basic
DA
HRA
and other Allowances
Employee: 1.75%
Employer: 4.75%
Coverage: All the employees Drawing wages up to Rs.10, 000/- per month engaged either directly or thru’ contractor.
From India, Madras
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Hi All, Hope there are different definitions given on ESI wages, the attachment will give you clear idea on components not be included on caclulating esi wages.
From India, Mumbai
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From India, Mumbai
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ESIC will be deducted from the gross salary of employees. Those employees who earn less than 10000/- per month are covered under the ESIC Act of 1948.
The Act specifies the contribution as follows:
1. Employee - 1.75% of the gross salary.
2. Employer - 4.75% of the employee's gross salary.
The Act is applicable as per the definition provided therein. Please thoroughly review the Act to gain a better understanding.
Regards,
Manoj Lehren
From India, Mumbai
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The Act specifies the contribution as follows:
1. Employee - 1.75% of the gross salary.
2. Employer - 4.75% of the employee's gross salary.
The Act is applicable as per the definition provided therein. Please thoroughly review the Act to gain a better understanding.
Regards,
Manoj Lehren
From India, Mumbai
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ESI is usually calculated on the Gross Pay of the employee. The employee side deduction would be 1.75%, and the employer contribution would be 4.75%. However, for employees whose gross pay is less than 2000, the employee should not be deducted for ESI. Hope this information is clear for you. If you have further doubts, mail to s.dhanu.mathy@gmail.com.
From India, Madras
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From India, Madras
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HI ESIC calculate on Actual Gross and contribution as below employee : 1.75% of Gross employer : 4.75% of Gross
From India, Ahmadabad
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From India, Ahmadabad
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Hi Sanju,
Check this official website for ESIC: [ESIC](http://esic.nic.in/)
From India, Madras
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Check this official website for ESIC: [ESIC](http://esic.nic.in/)
From India, Madras
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esi calculated in gross salary ie while processing contribution made to earned gross salary. all others are same as said before. regards shunmugam
From India, Madras
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From India, Madras
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Yes Deduction is on Basia+DA + all allownace except washing allowances and food coupons if given
From India, Bangalore
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From India, Bangalore
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Dear All , Please go through the attachment. Bets of Luck, Pawan Kashyap Asstt. Manager-HR
From India, Solon
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From India, Solon
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Hi,
Please find below the ESI websites:
- [ESIC](http://www.esic.nic.in)
- [www.esic.in](http://esic.in/)
Thank you.
From India, Madras
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Please find below the ESI websites:
- [ESIC](http://www.esic.nic.in)
- [www.esic.in](http://esic.in/)
Thank you.
From India, Madras
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Following components are not considered while calculating ESI:
1) Washing Allowance
2) Conveyance Allowance
3) Contribution paid by the employer towards PF/ESI
4) Gratuity
5) Production incentive
6) Encashment of leave
7) Any traveling allowance
8) Meal/food allowance
9) Entertainment Allowance
10) Newspaper Allowance
11) Bonus
12) Reimbursable school fees
Regards,
Prakash George
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1) Washing Allowance
2) Conveyance Allowance
3) Contribution paid by the employer towards PF/ESI
4) Gratuity
5) Production incentive
6) Encashment of leave
7) Any traveling allowance
8) Meal/food allowance
9) Entertainment Allowance
10) Newspaper Allowance
11) Bonus
12) Reimbursable school fees
Regards,
Prakash George
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Dear Sanju,
Please go to the ESIC website at www.esic.nic.in for the information you are looking for.
Regards,
Sarath Chandran
9884876574
Chennai
From India, Madras
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Please go to the ESIC website at www.esic.nic.in for the information you are looking for.
Regards,
Sarath Chandran
9884876574
Chennai
From India, Madras
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ESI contribution needs to be paid on "Wage" paid or payable to an employee during a wage period. Wage has been defined as all payments made in cash as per the contract of employment and any additional cash payment made within a periodicity of two months or less. Hence, the nomenclature of different components of the wage is not important, but the actual payment or liability to make payment for work done in cash is important. Anything paid in kind (like free food, housing, transport, etc.) is not wage, though it will attract income tax. I am attaching below an email reply given to Mr. Banerjee a few days back, in response to a specific question regarding certain kinds of allowances. Maybe it will provide you with some clarity.
"Dear Mr. Banerjee,
Out of the four kinds of allowances, each needs to be understood differently when it comes to (a) deciding the coverage limit of 10,000 and calculating contributions in case the employee is covered. Let us not mix up the issues. I will explain each case separately.
Overtime Allowance
This will not be taken into account for deciding coverage but has to be considered for the payment of contributions. For example, if an employee is receiving 9,500 as wage, including various monthly/bi-monthly paid cash allowances, and receives Rs. 550 as overtime in a month (total earnings 10,050), he will continue to be covered as if he is drawing Rs. 10,000 or below, but contributions need to be paid on the full 10,050 during the contribution period.
Incentive Allowance
If it is paid or payable quarterly, half-yearly, or annually, or in a periodicity of over two months, it need not be taken into account for the payment of contributions and also for deciding coverage, assuming that there is no contractual obligation. But if there is a contractual obligation, it will be taken into consideration for both coverage and payment. This is my interpretation, but in fact, ESIC normally does not claim contributions on incentives when paid quarterly/half-yearly or annually (as in the case of an annual bonus). But it will be considered both for the payment of contributions and deciding coverage when payment is made monthly. Normally, where incentives are available, people pay it monthly in the case of those whose other wage is close but below 10,000, to avoid ESIC but pay quarterly for others whose wage will be well below 10,000 even after taking incentives monthly.
Conveyance Allowance
There were contradictory judgments from High Courts, and sometimes in 2005 or so, a final clarification was given by ESI HQ. As per this, if the payment is a fixed amount or a percentage of Basic pay, or fixed for different cadres, irrespective of the actual amount incurred by the employee for conveyance from home to work and back, such an allowance, though labeled as "Conveyance allowance" or Transport allowance, etc., is wage and contribution needs to be paid. But TA paid for duty-related journeys (different from normal journeys from home to work and back) and reimbursement of actual conveyance charges subject to production proof of actual incurring for journeys from home to work and back, is not wage since such payment is excluded from the definition of wage. Similarly, if employees are paid transport/conveyance allowances based on the type of vehicle they are maintaining, subject to proof of owning a vehicle, and not a flat or fixed rate, such payment will be reimbursement or transportation allowance and not considered as wage for the payment of contributions. In fact, this is the correct interpretation as per the definition under Sec 2 (22). But in most cases, what is paid is a fixed amount depending on the cadre of employees, without bothering about the type of vehicle, distance, or proof, etc., and hence such payment has to be considered for the payment of ESI Contribution.
Tiffin Allowance
If the amount is paid in cash to the employee, ESI contribution is to be paid on it since it is nothing but an element of wage. But in case you provide food, or purchase food coupons or tokens for a hotel or canteen, and make a bulk payment to such a hotel against a bill, and supply free coupons or tokens, no contribution needs to be paid.
Also, remember that whatever payment is taken as wage for the payment of contributions, they are also taken into account for deciding coverage.
Eg. 1 Eg. 2
Basic wage 4000 Basic Wage 4000 DA 3000 DA 3000 Heat allowances 1000 Heat allowance 1000 Special allowance 2000 Spl Allow 2000 Overtime allowance 500 ESI Covered ESI Cover. Contribution on 10,000 Contribution Rs. 10,500
Eg. 3
Basic wage 4000 Basic Wage 4000 DA 3000 DA 3000 Heat allowances 1000 Heat allowance 1000 Special allowance 2000 Spl allowance 2000 Tiffin allowance 200 Overtime 500 Fixed Conveyance 500
Not covered Not Covered. No Contribution
Hope you are clear now.
ESIC has issued many circulars to their field offices and Regional offices. They do not supply them to Employers. However, they supply a small book called "Employers Hand Book." You can get it for free. In case it is not available with ESI Regional Office, you can write to Director (PR), ESI HQ, New Delhi. You can also ask for all circulars on Wages and clarification on various allowances issued up to date using the RTI Act.
Abdul O. Hamid"
From India, Coimbatore
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"Dear Mr. Banerjee,
Out of the four kinds of allowances, each needs to be understood differently when it comes to (a) deciding the coverage limit of 10,000 and calculating contributions in case the employee is covered. Let us not mix up the issues. I will explain each case separately.
Overtime Allowance
This will not be taken into account for deciding coverage but has to be considered for the payment of contributions. For example, if an employee is receiving 9,500 as wage, including various monthly/bi-monthly paid cash allowances, and receives Rs. 550 as overtime in a month (total earnings 10,050), he will continue to be covered as if he is drawing Rs. 10,000 or below, but contributions need to be paid on the full 10,050 during the contribution period.
Incentive Allowance
If it is paid or payable quarterly, half-yearly, or annually, or in a periodicity of over two months, it need not be taken into account for the payment of contributions and also for deciding coverage, assuming that there is no contractual obligation. But if there is a contractual obligation, it will be taken into consideration for both coverage and payment. This is my interpretation, but in fact, ESIC normally does not claim contributions on incentives when paid quarterly/half-yearly or annually (as in the case of an annual bonus). But it will be considered both for the payment of contributions and deciding coverage when payment is made monthly. Normally, where incentives are available, people pay it monthly in the case of those whose other wage is close but below 10,000, to avoid ESIC but pay quarterly for others whose wage will be well below 10,000 even after taking incentives monthly.
Conveyance Allowance
There were contradictory judgments from High Courts, and sometimes in 2005 or so, a final clarification was given by ESI HQ. As per this, if the payment is a fixed amount or a percentage of Basic pay, or fixed for different cadres, irrespective of the actual amount incurred by the employee for conveyance from home to work and back, such an allowance, though labeled as "Conveyance allowance" or Transport allowance, etc., is wage and contribution needs to be paid. But TA paid for duty-related journeys (different from normal journeys from home to work and back) and reimbursement of actual conveyance charges subject to production proof of actual incurring for journeys from home to work and back, is not wage since such payment is excluded from the definition of wage. Similarly, if employees are paid transport/conveyance allowances based on the type of vehicle they are maintaining, subject to proof of owning a vehicle, and not a flat or fixed rate, such payment will be reimbursement or transportation allowance and not considered as wage for the payment of contributions. In fact, this is the correct interpretation as per the definition under Sec 2 (22). But in most cases, what is paid is a fixed amount depending on the cadre of employees, without bothering about the type of vehicle, distance, or proof, etc., and hence such payment has to be considered for the payment of ESI Contribution.
Tiffin Allowance
If the amount is paid in cash to the employee, ESI contribution is to be paid on it since it is nothing but an element of wage. But in case you provide food, or purchase food coupons or tokens for a hotel or canteen, and make a bulk payment to such a hotel against a bill, and supply free coupons or tokens, no contribution needs to be paid.
Also, remember that whatever payment is taken as wage for the payment of contributions, they are also taken into account for deciding coverage.
Eg. 1 Eg. 2
Basic wage 4000 Basic Wage 4000 DA 3000 DA 3000 Heat allowances 1000 Heat allowance 1000 Special allowance 2000 Spl Allow 2000 Overtime allowance 500 ESI Covered ESI Cover. Contribution on 10,000 Contribution Rs. 10,500
Eg. 3
Basic wage 4000 Basic Wage 4000 DA 3000 DA 3000 Heat allowances 1000 Heat allowance 1000 Special allowance 2000 Spl allowance 2000 Tiffin allowance 200 Overtime 500 Fixed Conveyance 500
Not covered Not Covered. No Contribution
Hope you are clear now.
ESIC has issued many circulars to their field offices and Regional offices. They do not supply them to Employers. However, they supply a small book called "Employers Hand Book." You can get it for free. In case it is not available with ESI Regional Office, you can write to Director (PR), ESI HQ, New Delhi. You can also ask for all circulars on Wages and clarification on various allowances issued up to date using the RTI Act.
Abdul O. Hamid"
From India, Coimbatore
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The clarification may not be correct.
Washing allowance can be excluded from ESI only if a uniform is provided by the company, wearing the uniform is compulsory, and the allowance is a reasonable proportion of the total wage. For example, if a person receives Rs. 5000 as gross pay and is paid an additional Rs. 5000 as a washing allowance, the ESI department will not accept this as a genuine washing allowance but as a sham arrangement to exclude Rs. 5000 from the purview of ESI payment. So be careful.
Similarly, conveyance allowance is excluded only if it is a real reimbursement of traveling expenses. If it is a fixed amount paid to all employees regardless of how they are traveling, it is nothing but wage. Merely labeling it as a washing allowance will not exclude it.
Production incentive, if paid every month or every two months, or during a shorter period, will be considered wage and not excluded. However, if it is paid once every six months or year as a production bonus, it can be excluded.
Meal or food allowance paid regularly in cash must be taken into account for ESI contribution. Free meals can be excluded. Reimbursement of meal payments for duty-related travel can also be excluded. If you provide free meals through a coupon arrangement with a canteen or hotel, it can be excluded.
Similarly, newspaper and entertainment allowances must be taken into account for ESI contribution. Rarely will a company provide entertainment or even newspaper allowances to employees earning a monthly salary below Rs. 10,000. If you pay these allowances in cash, ESI contributions must also be paid.
The rest of the clarification is okay.
From India, Coimbatore
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Washing allowance can be excluded from ESI only if a uniform is provided by the company, wearing the uniform is compulsory, and the allowance is a reasonable proportion of the total wage. For example, if a person receives Rs. 5000 as gross pay and is paid an additional Rs. 5000 as a washing allowance, the ESI department will not accept this as a genuine washing allowance but as a sham arrangement to exclude Rs. 5000 from the purview of ESI payment. So be careful.
Similarly, conveyance allowance is excluded only if it is a real reimbursement of traveling expenses. If it is a fixed amount paid to all employees regardless of how they are traveling, it is nothing but wage. Merely labeling it as a washing allowance will not exclude it.
Production incentive, if paid every month or every two months, or during a shorter period, will be considered wage and not excluded. However, if it is paid once every six months or year as a production bonus, it can be excluded.
Meal or food allowance paid regularly in cash must be taken into account for ESI contribution. Free meals can be excluded. Reimbursement of meal payments for duty-related travel can also be excluded. If you provide free meals through a coupon arrangement with a canteen or hotel, it can be excluded.
Similarly, newspaper and entertainment allowances must be taken into account for ESI contribution. Rarely will a company provide entertainment or even newspaper allowances to employees earning a monthly salary below Rs. 10,000. If you pay these allowances in cash, ESI contributions must also be paid.
The rest of the clarification is okay.
From India, Coimbatore
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Dear Friends,
There has been a recent change in the wage limit, which has been increased from Rs. 10,000/- to Rs. 15,000/- with effect from 1st May 2010. I quote the following lines from the most authentic source, i.e., the Notification issued by the Government of India, Ministry of Labour & Employment from New Delhi, dated 20th April 2010:
1. These Rules may be called the Employees' State Insurance (Central) Amendment Rules, 2010.
2. These shall come into force from the 1st day of May 2010.
3. In the Employees' State Insurance (Central) Rules, 1950, in Rule 50, for the words "ten thousand", wherever they occur, the words "fifteen thousand" shall be substituted.
I request you to kindly visit my website: http://www.clapsindia.com and check with your management whether they are looking for the services available on a retainer basis on the website and revert to me, especially on compliance of Labour Laws and compliance Audit.
With regards and thanks,
Sincerely,
Dr. KSN Sarma
Advocate & Management Consultant
More at http://citehr.com#ixzz0nRjJK0EE
From India, Hyderabad
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There has been a recent change in the wage limit, which has been increased from Rs. 10,000/- to Rs. 15,000/- with effect from 1st May 2010. I quote the following lines from the most authentic source, i.e., the Notification issued by the Government of India, Ministry of Labour & Employment from New Delhi, dated 20th April 2010:
1. These Rules may be called the Employees' State Insurance (Central) Amendment Rules, 2010.
2. These shall come into force from the 1st day of May 2010.
3. In the Employees' State Insurance (Central) Rules, 1950, in Rule 50, for the words "ten thousand", wherever they occur, the words "fifteen thousand" shall be substituted.
I request you to kindly visit my website: http://www.clapsindia.com and check with your management whether they are looking for the services available on a retainer basis on the website and revert to me, especially on compliance of Labour Laws and compliance Audit.
With regards and thanks,
Sincerely,
Dr. KSN Sarma
Advocate & Management Consultant
More at http://citehr.com#ixzz0nRjJK0EE
From India, Hyderabad
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ESI: Employees’ State Insurance Act, 1948
Calculations: ESI will be calculated from Gross salary
Basic
DA
HRA
and other Allowances
Employee: 1.75%
Employer: 4.75%
Coverage: All the employees Drawing wages up to Rs.15, 000/- per month engaged either directly or thru’ contractor, THIS IS FROM MAY 2010
From India, Velluru
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Calculations: ESI will be calculated from Gross salary
Basic
DA
HRA
and other Allowances
Employee: 1.75%
Employer: 4.75%
Coverage: All the employees Drawing wages up to Rs.15, 000/- per month engaged either directly or thru’ contractor, THIS IS FROM MAY 2010
From India, Velluru
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Dear friends, its one of the best posts for sharing the knowledge about ESI, special thanks to Hameed sir for explaining the issues elaborately..........
From India, Hyderabad
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From India, Hyderabad
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Dear Devansh,
ESIC is deducted from the gross salary per month. It is paid by both the employee and the employer. The employee contributes 1.75% of their gross salary, and the employer contributes 4.75% of the employee's gross salary. The ceiling for ESIC coverage was previously 10,000/- gross salary per month, but it has now been increased to 15,000/- gross salary per month.
Regards,
Anshu
From India, Delhi
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ESIC is deducted from the gross salary per month. It is paid by both the employee and the employer. The employee contributes 1.75% of their gross salary, and the employer contributes 4.75% of the employee's gross salary. The ceiling for ESIC coverage was previously 10,000/- gross salary per month, but it has now been increased to 15,000/- gross salary per month.
Regards,
Anshu
From India, Delhi
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Dear friends,
I am newly joined to this community and I want to know to whom this ESIC cheque should be made payable. Could anyone provide me with this information? Also, what should I write on the account payee cheque for ESIC monthly payment?
Please do the needful.
Thank you.
From India, Bangalore
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I am newly joined to this community and I want to know to whom this ESIC cheque should be made payable. Could anyone provide me with this information? Also, what should I write on the account payee cheque for ESIC monthly payment?
Please do the needful.
Thank you.
From India, Bangalore
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Employee State Insurance.pdf
EMPLOYEE SALARY INCOME TAX CALCULATION.xls x