Dear All, I just wanted to confirm, while making a contribution for ESIC, do we have to take into account the number of days present as well, or would it be the same?
ESIC Calculation Example
For example, if an employee is present for 21 days in a month and their salary is 10,000, do we calculate ESIC on 10,000 according to 21 days + Sundays? Also, I would like to know about 31 or 28 days in a month.
Regards,
Ritika
From India, Delhi
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2ESIC Calculation Example
For example, if an employee is present for 21 days in a month and their salary is 10,000, do we calculate ESIC on 10,000 according to 21 days + Sundays? Also, I would like to know about 31 or 28 days in a month.
Regards,
Ritika
From India, Delhi
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Dear Member,
1. You are required to deduct the contribution from the wages of employees paid or payable at 1.75%. The number of days relevant for which the wages are paid or payable should be considered. Therefore, in addition to the number of days on which the employee was present, the days on which earned leave/casual leaves are sanctioned with wages, etc., are also to be taken into account.
2. The number of days for which wages are paid or payable should be correctly indicated in the records, i.e., in the Employees' Contribution Register or online records generated because, on the basis of such records, the eligibility of the employee to receive various benefits under the ESI Act and rules/regulations framed thereunder is determined. In case you indicate fewer days, the employee can be debarred or not eligible for certain benefits, and in case you mention in excess, it will be a wrong statement for the purposes of entitlement of benefits as calculated in the ESIC Branch Office. If any amount is paid wrongly to the insured person due to mentioning such a wrong number of days, the same will be objectionable as well as punishable under section 84 of the said Act.
3. Further, the terms "average daily wages" or "standard benefit rate," etc., are determined based on the records as furnished by you as mentioned in the paragraphs above. Please see the definitions of such words under Rule 2 of ESI (Central) Rules, 1952.
4. I suggest you also download relevant material from the official website of ESIC, or you can discuss the issue with the appropriate Branch Office of ESIC in your area in case you have any doubt on such procedural aspects.
From India, Noida
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1. You are required to deduct the contribution from the wages of employees paid or payable at 1.75%. The number of days relevant for which the wages are paid or payable should be considered. Therefore, in addition to the number of days on which the employee was present, the days on which earned leave/casual leaves are sanctioned with wages, etc., are also to be taken into account.
2. The number of days for which wages are paid or payable should be correctly indicated in the records, i.e., in the Employees' Contribution Register or online records generated because, on the basis of such records, the eligibility of the employee to receive various benefits under the ESI Act and rules/regulations framed thereunder is determined. In case you indicate fewer days, the employee can be debarred or not eligible for certain benefits, and in case you mention in excess, it will be a wrong statement for the purposes of entitlement of benefits as calculated in the ESIC Branch Office. If any amount is paid wrongly to the insured person due to mentioning such a wrong number of days, the same will be objectionable as well as punishable under section 84 of the said Act.
3. Further, the terms "average daily wages" or "standard benefit rate," etc., are determined based on the records as furnished by you as mentioned in the paragraphs above. Please see the definitions of such words under Rule 2 of ESI (Central) Rules, 1952.
4. I suggest you also download relevant material from the official website of ESIC, or you can discuss the issue with the appropriate Branch Office of ESIC in your area in case you have any doubt on such procedural aspects.
From India, Noida
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It is very simple as below:
1. You have to contribute on the gross salary earned in the month.
2. If the salary is fixed on a monthly basis, mention the days you were paid, inclusive of Sundays or holidays, excluding loss pay/absent days.
3. If it is on a daily basis, mention the days only.
Furthermore, if you had a query regarding a salary of 10k per month, you should divide the salary by the days in the month (whether 28/30/31) to arrive at a day's salary. Then, multiply it by the days payable, excluding LOP days.
Regards,
Puru
From India, Bangalore
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1. You have to contribute on the gross salary earned in the month.
2. If the salary is fixed on a monthly basis, mention the days you were paid, inclusive of Sundays or holidays, excluding loss pay/absent days.
3. If it is on a daily basis, mention the days only.
Furthermore, if you had a query regarding a salary of 10k per month, you should divide the salary by the days in the month (whether 28/30/31) to arrive at a day's salary. Then, multiply it by the days payable, excluding LOP days.
Regards,
Puru
From India, Bangalore
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