Hi seniors, if an employee falls under ESI for 6 months and after that, the gross of that employee exceeds Rs. 15,000/-, should ESI be paid until the half-yearly return of that particular year, or can it be stopped once the rise has occurred?
From India, Bangalore
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From India, Bangalore
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You will get an answer to your query at the link provided below: https://www.citehr.com/459252-esic.html
From India, Mumbai
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2584From India, Mumbai
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ESI should be paid until the half-yearly return of that particular year. For example, let's say an employee, Mr. Abc, received a salary hike, and the gross salary increased to 16,000 in June '13. In this case, the ESIC should be paid until we submit the half-yearly return in May '13. After that, we can stop ESIC contributions.
Thanks,
Nitesh Verma
From India, Bangalore
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Thanks,
Nitesh Verma
From India, Bangalore
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Understanding Half-Yearly Returns
Can you please provide more information on half-yearly returns? What is it? What is the period for submission? When and how should it be submitted, and why? What are the consequences if it is not submitted, for you, ESI, and IP?
Your response will help members understand the ESI Act.
Regards
From India, Mumbai
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Can you please provide more information on half-yearly returns? What is it? What is the period for submission? When and how should it be submitted, and why? What are the consequences if it is not submitted, for you, ESI, and IP?
Your response will help members understand the ESI Act.
Regards
From India, Mumbai
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Understanding ESI Contribution Periods
It is not a half-yearly return but a contribution period. This means that an employee whose salary (ESI qualifying salary without considering unusual variable pay, like incentives, overtime pay, and other amounts like washing allowance which are excluded from wages) crosses the limit (currently Rs 15,000) in the middle of the contribution period must continue to contribute until the end of the contribution period.
For instance, if the salary crosses Rs 15,000 in June, contributions should be paid until September. Similarly, if in October the salary is increased, contributions should be paid until March, i.e., the end of the contribution period.
Salary Considerations for Coverage
The salary for coverage should only be considered as the salary for out-of-coverage. If a salary increase is due to an increase in any variable component in any month, that should not be considered an increase for the purpose of out-of-coverage. Variables that are paid at intervals of not more than two months should be considered as part of the salary. Overtime will qualify for contribution, although for deciding coverage, the same is not taken into account.
Regards,
Madhu.T.K
From India, Kannur
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It is not a half-yearly return but a contribution period. This means that an employee whose salary (ESI qualifying salary without considering unusual variable pay, like incentives, overtime pay, and other amounts like washing allowance which are excluded from wages) crosses the limit (currently Rs 15,000) in the middle of the contribution period must continue to contribute until the end of the contribution period.
For instance, if the salary crosses Rs 15,000 in June, contributions should be paid until September. Similarly, if in October the salary is increased, contributions should be paid until March, i.e., the end of the contribution period.
Salary Considerations for Coverage
The salary for coverage should only be considered as the salary for out-of-coverage. If a salary increase is due to an increase in any variable component in any month, that should not be considered an increase for the purpose of out-of-coverage. Variables that are paid at intervals of not more than two months should be considered as part of the salary. Overtime will qualify for contribution, although for deciding coverage, the same is not taken into account.
Regards,
Madhu.T.K
From India, Kannur
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I agree with your views, but I have one doubt. If any employee is covered under ESI and he/she leaves in the month of July '12, what should we do? Will the ESI contributions stop at the time of leaving the company's service or not?
From India, Gurgaon
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From India, Gurgaon
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Yes you have to pay the esic amount till next half yearly return.
From Saudi Arabia, Jiddah
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From Saudi Arabia, Jiddah
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H Please note that if the employee leaves in the middle of the contribution period his contribution will automatically stop from the last day of his leaving. Sohan
From India, New Delhi
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From India, New Delhi
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Yes, you have to pay the ESIC amount until the next half-yearly return. You do not need to pay ESI from the date of leaving if the employee has left the organization. If the employee is still working and receives a salary of ₹14,800 in May and ₹19,000 or ₹20,000 in June, whatever increase he/she gets, you have to deduct 1.75% from the gross amount. You are required to pay 4.75% from the employer's contribution until the next half-yearly returns are submitted.
From India, Bangalore
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From India, Bangalore
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ESI contribution Relaxation Period.jpeg
ESI 42 Days Contribution Relaxation Period - March 2020.pdf