Hi, I'm Balaji. I just joined with you.
If an employee is contributing to ESI at his gross Rs. 9000 and his gross income increases to Rs. 11500, does he have to continue contributing until the end of the half-year or can he close the contribution?
If yes, on which amount does he have to contribute? For example, for April and May, his salary was 9000, and ESI was contributed on 9k. Now, his salary is 11500. Does he have to contribute based on 9k or 11k?
Please clarify, experts. Thanks, Balaji
From India, Kochi
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If an employee is contributing to ESI at his gross Rs. 9000 and his gross income increases to Rs. 11500, does he have to continue contributing until the end of the half-year or can he close the contribution?
If yes, on which amount does he have to contribute? For example, for April and May, his salary was 9000, and ESI was contributed on 9k. Now, his salary is 11500. Does he have to contribute based on 9k or 11k?
Please clarify, experts. Thanks, Balaji
From India, Kochi
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Hi , I am attaching document. Hope this help you. Please let me know if you need any help. Regards Suman
From India, Calcutta
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1From India, Calcutta
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Hi Balaji,
The ESI contribution needs to be deducted on 10,000/-, not on his 11,500/-. Also, you have to continue the contribution as per the ESI calendar, i.e., from April to September and October to March. You can stop the contribution after September 08.
Chitra
From India, Mumbai
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The ESI contribution needs to be deducted on 10,000/-, not on his 11,500/-. Also, you have to continue the contribution as per the ESI calendar, i.e., from April to September and October to March. You can stop the contribution after September 08.
Chitra
From India, Mumbai
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Dear all,
If any employee crosses the ESI limit during the contribution period by virtue of any arrears, increment, etc., then he/she will remain a member of ESI until that period of contribution, and the ESI contribution will be based on the increased wages and not on 10,000/- as mentioned by Chitra.
Hope this will clear your query.
From India, Delhi
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If any employee crosses the ESI limit during the contribution period by virtue of any arrears, increment, etc., then he/she will remain a member of ESI until that period of contribution, and the ESI contribution will be based on the increased wages and not on 10,000/- as mentioned by Chitra.
Hope this will clear your query.
From India, Delhi
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Hello dear, if the gorss salary hike up to 10000 then from that month there is no need to deduct the ESI contribution. so pls to stop to deduct the ESI contribution. Regards Chirag Panclholi
From India, Vadodara
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From India, Vadodara
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If i am right then you have to deduct on the revised salary even though the salary get incresed more than 10,000 up to the contribution period. MRN
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Dear Chirag,
You can stop deducting ESI contributions once the contribution period is over. For example, if an employee receives an increase in April, they will remain an ESI member until September, and ESI deductions must continue for that contribution period. The employee will be exempt from deductions starting from the next contribution period, i.e., from October onwards.
From India, Delhi
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You can stop deducting ESI contributions once the contribution period is over. For example, if an employee receives an increase in April, they will remain an ESI member until September, and ESI deductions must continue for that contribution period. The employee will be exempt from deductions starting from the next contribution period, i.e., from October onwards.
From India, Delhi
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Dear all,
If the salary is raised during the contribution period, i.e., April to September and October to March, the ESI contribution should be continued for the raised salary only and not for the ceiling amount.
Regards,
Alphonse
09443625359
From India, Madras
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If the salary is raised during the contribution period, i.e., April to September and October to March, the ESI contribution should be continued for the raised salary only and not for the ceiling amount.
Regards,
Alphonse
09443625359
From India, Madras
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Hi everybody,
I have a small doubt regarding the calculation. As Mr. Balaji said, the employee is already a member of ESI. So, why can't the deductions be done even though his gross is up to 10,000 or more?
Kindly clarify the doubt for me as I am also in this process.
Regards,
Saritha
From India, Hyderabad
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I have a small doubt regarding the calculation. As Mr. Balaji said, the employee is already a member of ESI. So, why can't the deductions be done even though his gross is up to 10,000 or more?
Kindly clarify the doubt for me as I am also in this process.
Regards,
Saritha
From India, Hyderabad
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If the employee is already contributing to ESI at his gross of Rs. 9000, and his gross salary increases within a six-month period, we must deduct the ESI contributions until the end of the contribution period.
The amount he has to contribute now that his salary is Rs. 11500, so he has to contribute based on Rs. 11500 only, not on Rs. 9000.
Ramesh
From India, Hyderabad
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The amount he has to contribute now that his salary is Rs. 11500, so he has to contribute based on Rs. 11500 only, not on Rs. 9000.
Ramesh
From India, Hyderabad
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If an employee received an increment in June 2008 from Rs 9500 to Rs 12000, but this increase was implemented retrospectively, with arrears for April and May 2008 being paid in June (effective from April 2008), the question arises whether the employer is required to provide coverage for the employee until the completion of the contribution period (i.e., October 2008) or if the employer can stop the coverage according to ESI rules.
Kindly clarify this matter, and if possible, provide any relevant case law.
Sathya
From India
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Kindly clarify this matter, and if possible, provide any relevant case law.
Sathya
From India
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i have some dought if employee has not coming from last 2 month on which basis he will abscoding or terminating & also send me the matter which i have to put in his letter. Thanks & Regards, Vaibhav
From India
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From India
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Hi,
ESI will be deducted on 10,000, and if we are paying arrears, ESI will be deducted on the differential amount.
For example: Current Salary is Rs. 9,000, and Revised Salary is Rs. 11,000.
ESI will be deducted on 11,000 - 9,000 = 2,000.
Amit
From India, Chandigarh
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ESI will be deducted on 10,000, and if we are paying arrears, ESI will be deducted on the differential amount.
For example: Current Salary is Rs. 9,000, and Revised Salary is Rs. 11,000.
ESI will be deducted on 11,000 - 9,000 = 2,000.
Amit
From India, Chandigarh
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Hi,
In case the employee's gross has exceeded the ESI limit, there shall not be any deduction for ESI. As per government laws, the ESI maximum limit is ₹10,000. Therefore, if an employee's gross income has exceeded this amount, their name can be removed from ESI. To do this, an application can be submitted to the ESI organization to request the removal of the employee's name.
Thanks and regards,
Manisha
From India, Gurgaon
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In case the employee's gross has exceeded the ESI limit, there shall not be any deduction for ESI. As per government laws, the ESI maximum limit is ₹10,000. Therefore, if an employee's gross income has exceeded this amount, their name can be removed from ESI. To do this, an application can be submitted to the ESI organization to request the removal of the employee's name.
Thanks and regards,
Manisha
From India, Gurgaon
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Dear Friends, We need to deduct until that period i.e on going half year is completed. Regards Amith R.
From India, Bangalore
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From India, Bangalore
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not like that. We have to stop deducting the ESI from which month he has crossed the slab of 10000/-
From India, Madras
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From India, Madras
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Hi, Mr. Rajeev Verma has provided the correct way of deducting the ESI contribution. Also, the contribution will continue for that contribution period (until September 08). However, his benefit period will continue until March 2009.
Thank you.
From India, Mumbai
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Thank you.
From India, Mumbai
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Dear Rajeev,
Thank you for the information. I have a small query - if an employee wants to continue the ESI contribution even after the salary hike to Rs. 11,000 and wishes to extend the ESI services to his family due to their needs, is it possible?
Thanks and Regards,
Sujatha
From India, Bangalore
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Thank you for the information. I have a small query - if an employee wants to continue the ESI contribution even after the salary hike to Rs. 11,000 and wishes to extend the ESI services to his family due to their needs, is it possible?
Thanks and Regards,
Sujatha
From India, Bangalore
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Dear All
As per Employees' State Insurance (Central) Rules, 1950, Section 50 - The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be Ten Thousand rupees a month :
Provided that an employee whose wages (excluding remuneration for overtime work) exceed Ten thousand rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
Also in reply to Sujathas query - the wage limit for coverage as per the rules has exceeded and if the contribution period has also ended, the employee will not be a covered employee
Regards
Arun
From India, Kochi
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As per Employees' State Insurance (Central) Rules, 1950, Section 50 - The wage limit for coverage of an employee under sub-clause (b) of clause (9) of section 2 of the Act shall be Ten Thousand rupees a month :
Provided that an employee whose wages (excluding remuneration for overtime work) exceed Ten thousand rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
Also in reply to Sujathas query - the wage limit for coverage as per the rules has exceeded and if the contribution period has also ended, the employee will not be a covered employee
Regards
Arun
From India, Kochi
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Dear Chirag,
Rajeev is correct. The ESI deduction should be made until the end of the contribution period even if the individual crosses the ESI ceiling in between the contribution period.
Regards,
Hariharan N
From India, Madras
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Rajeev is correct. The ESI deduction should be made until the end of the contribution period even if the individual crosses the ESI ceiling in between the contribution period.
Regards,
Hariharan N
From India, Madras
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Hi,
I recently joined Medplus in Bangalore. The Head office is located in Hyderabad only. Currently, we are processing PF challans in Hyderabad for employees in Karnataka. I have a doubt - do I need to have a separate PF code for them, or can we continue to pay in Hyderabad only? Is it necessary to obtain a separate code?
Rafiq
From India, Hyderabad
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I recently joined Medplus in Bangalore. The Head office is located in Hyderabad only. Currently, we are processing PF challans in Hyderabad for employees in Karnataka. I have a doubt - do I need to have a separate PF code for them, or can we continue to pay in Hyderabad only? Is it necessary to obtain a separate code?
Rafiq
From India, Hyderabad
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You are not correct, Ms. Manisha. There is no provision in the ESI Act/Scheme (there is no other law governing the ESI Scheme than the ESI Act and the scheme framed thereunder) with respect to the exemption of an employee after his/her salary increases over the coverage ceiling. I have been practicing ESI/EPF Law and labor laws as a Consultant for the last 13 years, and I have necessary proof to support my claim. If you need clarification, please ask, but do not misguide anyone.
From India, Delhi
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From India, Delhi
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Hi Balaji His Salry is 9000/month he is in coverage of Esi but when his salry is hiked more than 10000 he is out of coverage of ESI.so his ESI will not deducted. with regards Anil Kumar Executive HRA
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Dear all, I saw all your replies. Somebody is half off correct. The correct answer is if the employee crosses 10,000, i.e., 10,001, there is no need to deduct the ESI contribution. However, if they cross that limit between the return periods, i.e., April-September and October-March, we must consider the case where the limit is crossed in June. In this scenario, we will deduct the contribution up to September. This deduction must be based on the total gross, i.e., 11,500. After September, we can stop the deduction. So, deduct the contribution based on 11,500 (total gross). Okay, have a nice day. Bye. Catch me on 9346526033.
From India, Visakhapatnam
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From India, Visakhapatnam
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Hi, if the ESIC once paid in the contribution period, suppose in the month of April on Rs. 9600 and his salary increases to Rs. 11500 in the month of May, then we are required to pay on the whole sum (i.e., Rs. 11,500) till the continuation of the contribution period (till September).
From India
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From India
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Hi,
If the salary is raised during the contribution period from April to September and October to March, the ESI contribution should continue for the rest of the months based on the total increased gross amount, not on the ceiling amount. This is because the benefits of this contribution period apply for the next six months.
From India, Pune
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If the salary is raised during the contribution period from April to September and October to March, the ESI contribution should continue for the rest of the months based on the total increased gross amount, not on the ceiling amount. This is because the benefits of this contribution period apply for the next six months.
From India, Pune
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Dear,
ESI at 1.75% is to be deducted from employees' gross salary (increase), and employers also have to contribute 4.75% on the same gross salary.
Samarth Associates
ESI, PF, & Labour Law Management Consultant.
:p
From India, Mumbai
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ESI at 1.75% is to be deducted from employees' gross salary (increase), and employers also have to contribute 4.75% on the same gross salary.
Samarth Associates
ESI, PF, & Labour Law Management Consultant.
:p
From India, Mumbai
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Hi all, No need to deduct ESI if the salary is more than or eaual to 10100... Regards, Vennila
From India, Madras
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From India, Madras
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Dear Balaji,
We faced this problem in our company a year ago. We have to keep paying until September if you have already paid for April. However, the amount to be considered for deduction is debatable. As a precaution, we paid the revised amount, not limited to Rs. 10,000/-. The difference for 8 of such employees was around Rs. 2,500/- only. Therefore, if the number of employees is less, you can go ahead and pay up for the revised amount to avoid delay. If the number is huge, wait until I get a legal opinion on this. :p
Warm Regards,
Sandeep Powar
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We faced this problem in our company a year ago. We have to keep paying until September if you have already paid for April. However, the amount to be considered for deduction is debatable. As a precaution, we paid the revised amount, not limited to Rs. 10,000/-. The difference for 8 of such employees was around Rs. 2,500/- only. Therefore, if the number of employees is less, you can go ahead and pay up for the revised amount to avoid delay. If the number is huge, wait until I get a legal opinion on this. :p
Warm Regards,
Sandeep Powar
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Hi Minkoo, thanks for correcting me. I have read an article on ESI and its deductions, which is why I wrote that. I would be happy if you could provide me with some more information in this area. Thanks and regards, Vamn
From India, Gurgaon
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From India, Gurgaon
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RAJEEV IS CORRECT ESIC DEDUCTION WILL BE ON INCREASED GROSS UP TO THE END OF SEPT OR MARCH OF THE RELEVANT HALF YEAR END. Kashi
From India, Benaulim
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From India, Benaulim
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Hi, As suggested by other freinds, Salary exceeding Rs.10,000/-, there will be no esi deduction. bye Katyayani
From India, Hyderabad
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From India, Hyderabad
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Friends,
Regarding the question of Mr. Balaji, I find some answers wrong and some correct. Let me explain the legal position.
"Employee" for the purpose of compliance under the ESI Act is one whose wage is $10,000 or below that, provided that if the wage goes beyond this threshold during a particular Contribution period (April to September and October to March), he will continue to be an Employee during that particular contribution period, and not thereafter - Provision to Sec 2 (9) (b) of the ESI Act.
Contribution needs to be paid on the Wage as defined in Sec 2 (22). There is no limit provided in the definition.
Hence, the contribution needs to be paid on the actual wage paid or payable during the currency of the Contribution period, not merely for Rs 10,000, if the Employee was drawing Rs 10,000 or below at the commencement of the Contribution period, that is April or October. You cannot restrict to 4.75%/1.75% of Rs 10,000.
A good HR manager should ensure that wage increases/increments, etc., start from April or October, in the case of those whose wage is below $10,000 per month, to avoid this.
O. Abdul Hameed Formerly Additional Commissioner ESI Corporation.
From India, Coimbatore
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Regarding the question of Mr. Balaji, I find some answers wrong and some correct. Let me explain the legal position.
"Employee" for the purpose of compliance under the ESI Act is one whose wage is $10,000 or below that, provided that if the wage goes beyond this threshold during a particular Contribution period (April to September and October to March), he will continue to be an Employee during that particular contribution period, and not thereafter - Provision to Sec 2 (9) (b) of the ESI Act.
Contribution needs to be paid on the Wage as defined in Sec 2 (22). There is no limit provided in the definition.
Hence, the contribution needs to be paid on the actual wage paid or payable during the currency of the Contribution period, not merely for Rs 10,000, if the Employee was drawing Rs 10,000 or below at the commencement of the Contribution period, that is April or October. You cannot restrict to 4.75%/1.75% of Rs 10,000.
A good HR manager should ensure that wage increases/increments, etc., start from April or October, in the case of those whose wage is below $10,000 per month, to avoid this.
O. Abdul Hameed Formerly Additional Commissioner ESI Corporation.
From India, Coimbatore
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Esi will be calculted on the current gorss till the contribution period end after that employee will be excluded.
From United States, Chicago
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From United States, Chicago
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Hi Suman,
For your information, you were added to this sheet to only mention the contribution period for employees whose salary is below 10000. However, as per your information, if the gross salary increases in the middle of the contribution period, the total contribution amount will also automatically increase by the end of the contribution period.
From India, Pune
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For your information, you were added to this sheet to only mention the contribution period for employees whose salary is below 10000. However, as per your information, if the gross salary increases in the middle of the contribution period, the total contribution amount will also automatically increase by the end of the contribution period.
From India, Pune
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Hi all,
The ESI contribution will be calculated on the gross wages, whether it is ₹11,500 or ₹115,000, and will continue until September or April of the corresponding year.
Regards,
Jenender Chawla
9711304112
From India, New Delhi
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The ESI contribution will be calculated on the gross wages, whether it is ₹11,500 or ₹115,000, and will continue until September or April of the corresponding year.
Regards,
Jenender Chawla
9711304112
From India, New Delhi
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Dear Friend,
If the employee salary exceeds more than Rs. 10,000 per month, the employee is exempted from the scheme.
Regarding your query, if the employee salary exceeds Rs. 10,000 during the contribution period, you will continue such employee up to the period.
The contribution is to be deducted as 1.75% on Rs. 11,500 till the end of the period, i.e., up to September.
This is for your kind information.
Regards, P.V. Rama Rao
From India, Hyderabad
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If the employee salary exceeds more than Rs. 10,000 per month, the employee is exempted from the scheme.
Regarding your query, if the employee salary exceeds Rs. 10,000 during the contribution period, you will continue such employee up to the period.
The contribution is to be deducted as 1.75% on Rs. 11,500 till the end of the period, i.e., up to September.
This is for your kind information.
Regards, P.V. Rama Rao
From India, Hyderabad
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Dear All,
For the benefit of all, I am providing the link related to ESI. The link can be followed for further inquiry.
[ESI Act](http://www.helplinelaw.com/docs/emp-state-ins/emp-state-ins1.shtml)
From India, Delhi
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For the benefit of all, I am providing the link related to ESI. The link can be followed for further inquiry.
[ESI Act](http://www.helplinelaw.com/docs/emp-state-ins/emp-state-ins1.shtml)
From India, Delhi
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Hi,
Please let me know about the PF deduction, i.e., 12% on the basic as employee contribution and 12% on the basic as employer contribution. The sealing limit is Rs 6500 per month.
My doubt is, suppose an employee receives Basic & D.A together for Rs. 11000, whether we have to deduct from the employee & employer contribution for the sealing amount of Rs. 6500 or Rs. 11000 (Employer is willing to pay his contribution for Rs. 11000).
Please clarify.
Regards,
Satheesh
From India, Madras
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Please let me know about the PF deduction, i.e., 12% on the basic as employee contribution and 12% on the basic as employer contribution. The sealing limit is Rs 6500 per month.
My doubt is, suppose an employee receives Basic & D.A together for Rs. 11000, whether we have to deduct from the employee & employer contribution for the sealing amount of Rs. 6500 or Rs. 11000 (Employer is willing to pay his contribution for Rs. 11000).
Please clarify.
Regards,
Satheesh
From India, Madras
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Dear all,
Any idea on how many years we have to keep all the records to facilitate inspection from ESI inspector? Currently, the ESI inspector wants to examine my company documents for the year 2000-01. It is very difficult to dig out old cash books, etc. Is there any law governing this?
From India, Ernakulam
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Any idea on how many years we have to keep all the records to facilitate inspection from ESI inspector? Currently, the ESI inspector wants to examine my company documents for the year 2000-01. It is very difficult to dig out old cash books, etc. Is there any law governing this?
From India, Ernakulam
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Well, there is no specific period mentioned in the ESI Act regarding the back period for which you are required to keep the records ready for inspection by the ESI inspectors. There is one provision regarding the Inspection Book, wherein it is mentioned that the ESI Inspection book is required to be kept safe for five years from the date of the last inspection. As per the new inspection policy, routine inspections are not done; only the defaulter units or the randomly selected units are inspected. However, you are still required to keep your accounts books ready for their inspection. Further, as per this policy, no inspections are being done without the simultaneous checking of ledger records.
Now, your question is regarding the law by which this is governed? The ESI Act doesn't lay down any specific period for keeping records except the Inspection book. However, there is a provision in the Income Tax Act wherein an assessee is required to keep the last seven years of their records safe - your CA may shed more light on this. Many of my clients, whenever they are asked about the production of old records, quote this provision and give them a letter, which is generally accepted by the department. Now, you are being asked to produce the records for 2000-01, which in my opinion, you must produce; else they'll claim ad-hoc contribution on anything they may deem fit, and in the court of law, you will not be able to defend yourself just by making a plea that the records are old and hence untraceable because the ESI will say that there is nothing in the ESI Act regarding this, and even the IT Act requires the safekeeping of the last seven years of records.
From India, Delhi
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Now, your question is regarding the law by which this is governed? The ESI Act doesn't lay down any specific period for keeping records except the Inspection book. However, there is a provision in the Income Tax Act wherein an assessee is required to keep the last seven years of their records safe - your CA may shed more light on this. Many of my clients, whenever they are asked about the production of old records, quote this provision and give them a letter, which is generally accepted by the department. Now, you are being asked to produce the records for 2000-01, which in my opinion, you must produce; else they'll claim ad-hoc contribution on anything they may deem fit, and in the court of law, you will not be able to defend yourself just by making a plea that the records are old and hence untraceable because the ESI will say that there is nothing in the ESI Act regarding this, and even the IT Act requires the safekeeping of the last seven years of records.
From India, Delhi
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Dear Rajiv,
You are absolutely correct. Even if an increment took place in between the contribution period, then ESI contribution should extend until the completion of the contribution period. But what will happen in a case where the decision of an increment has been delayed (i.e., say until July), and thereafter the increments have been provided retrospectively from the beginning of the contribution period, say from April?
In such cases, I believe that ESI deductions should stop immediately in those cases where the gross salaries have crossed Rs 10,000 after considering the increments. The deductions pertaining to the earlier period (i.e., April, May, June) should be refunded to those employees, and Employer's contributions can be set off against the ensuing period's contributions.
I hope I am clear about this. In case of any queries regarding this, please revert back to me.
Thanks,
Sathyanarayana Bhat
From India
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You are absolutely correct. Even if an increment took place in between the contribution period, then ESI contribution should extend until the completion of the contribution period. But what will happen in a case where the decision of an increment has been delayed (i.e., say until July), and thereafter the increments have been provided retrospectively from the beginning of the contribution period, say from April?
In such cases, I believe that ESI deductions should stop immediately in those cases where the gross salaries have crossed Rs 10,000 after considering the increments. The deductions pertaining to the earlier period (i.e., April, May, June) should be refunded to those employees, and Employer's contributions can be set off against the ensuing period's contributions.
I hope I am clear about this. In case of any queries regarding this, please revert back to me.
Thanks,
Sathyanarayana Bhat
From India
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