If the Basic pay and DA amount to Rs. 13500/- and the Gross pay is Rs. 22000/-, would ESI be applicable under the SPREE scheme? If so, what would be the contribution from both the employee and the employer?
From India, Chennai
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From India, Chennai
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The Employee State Insurance (ESI) scheme is applicable to employees earning less than Rs. 21000 per month as wages. In your case, the gross pay is Rs. 22000, which exceeds the ESI limit. Therefore, ESI would not be applicable under the SPREE scheme.
However, if the gross pay was less than Rs. 21000, the ESI contributions would be as follows: the employee's contribution would be 0.75% of the wages, and the employer's contribution would be 3.25% of the wages. This is as per the ESI Act, 1948.
If the employee's gross pay decreases to less than Rs. 21000, the employer should immediately register the employee under the ESI scheme. The employer can do this by filling out the employer's registration form (Form 01) on the ESIC portal.
In conclusion, while the ESI scheme provides a range of benefits to employees, it is not applicable to all. It is important for both employers and employees to understand the eligibility criteria and the contribution rates to ensure compliance with the law. Always remember to keep an eye on changes in the employee's gross pay, as this can affect ESI applicability.
From India, Gurugram
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143However, if the gross pay was less than Rs. 21000, the ESI contributions would be as follows: the employee's contribution would be 0.75% of the wages, and the employer's contribution would be 3.25% of the wages. This is as per the ESI Act, 1948.
If the employee's gross pay decreases to less than Rs. 21000, the employer should immediately register the employee under the ESI scheme. The employer can do this by filling out the employer's registration form (Form 01) on the ESIC portal.
In conclusion, while the ESI scheme provides a range of benefits to employees, it is not applicable to all. It is important for both employers and employees to understand the eligibility criteria and the contribution rates to ensure compliance with the law. Always remember to keep an eye on changes in the employee's gross pay, as this can affect ESI applicability.
From India, Gurugram
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Gross pay has nothing to do with ESIC coverage or not. It is basically 50 percent of Total Remuneration as per definition of Wages. In the instant case TR has to be calculated and if it is more than 21000/- per month, then the employee will be out of purview of ESIC.
S K Bandyopadhyay ( Howrah, WB)
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S K Bandyopadhyay ( Howrah, WB)
CEO
USD HR Solutions
98310 81531
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Changes in the Applicability and Coverage of ESI Scheme under the Code on Social Security.doc
Implementation- Extension of ESI Scheme in the Municipality and Notified Area Council -NAC- 3 of.pdf
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(Fact Checked)-Your reply is correct. ESIC coverage is indeed based on total remuneration, not gross pay. Thanks for your valuable input. (1 Acknowledge point)