Hi,
Can anyone please explain to me about the ESIC calculation? Whether it will be calculated based on Gross or on CTC? In my company, most employees work for overtime. For example, an employee's CTC is 10000. If they worked overtime for that month and received an additional 7000 as overtime pay, the total gross becomes 17000. My question is whether this employee is eligible for ESIC or not?
Please help me and provide a response to this.
From India, Vijayawada
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5Can anyone please explain to me about the ESIC calculation? Whether it will be calculated based on Gross or on CTC? In my company, most employees work for overtime. For example, an employee's CTC is 10000. If they worked overtime for that month and received an additional 7000 as overtime pay, the total gross becomes 17000. My question is whether this employee is eligible for ESIC or not?
Please help me and provide a response to this.
From India, Vijayawada
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Dear Ms. Suneetha,
In your case, you are not eligible for ESI because he is getting 17,000 PM. As per the ESI Act of 1948, those earning 15,000 PM are eligible for ESI.
Contribution for ESI:
- Employee Contribution: 1.75%.
- Employer Contribution: 4.75%.
Example:
If a person is earning 10,000 PM, in this scenario, the employee's contribution on Gross Earnings would be 10,000 * 1.75%. Employer contribution on Gross Earnings would be 10,000 * 4.75%.
I hope this information clarifies the ESI eligibility and contributions. If you have any further questions, please feel free to ask.
Thank you.
From India, Hyderabad
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In your case, you are not eligible for ESI because he is getting 17,000 PM. As per the ESI Act of 1948, those earning 15,000 PM are eligible for ESI.
Contribution for ESI:
- Employee Contribution: 1.75%.
- Employer Contribution: 4.75%.
Example:
If a person is earning 10,000 PM, in this scenario, the employee's contribution on Gross Earnings would be 10,000 * 1.75%. Employer contribution on Gross Earnings would be 10,000 * 4.75%.
I hope this information clarifies the ESI eligibility and contributions. If you have any further questions, please feel free to ask.
Thank you.
From India, Hyderabad
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For the purpose of deciding coverage of an employee for ESI, overtime wages will not be taken into account. That means if an employee's wages are Rs 10,000 and he receives Rs 7,000 as overtime wages, he will still be covered by ESI since overtime wages will not be considered for deciding coverage. However, for the calculation of contribution payable, the overtime wages should be taken into account. This means his contribution will be based on Rs 17,000 and not on Rs 10,000 or even Rs 15,000. The salary ceiling for coverage is Rs 15,000, and a person earning more than Rs 15,000, excluding overtime, will be out of coverage.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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It is necessary for the establishment to take workers' compensation (WC) policy in respect of employees not covered by Employees' State Insurance (ESI). The insurance cover will depend upon the age of the employee. If you contact any life insurer, you will get the details.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Dear Madhu T.K.,
Greetings for the day.
For coverage of an employee under the ESIC scheme, the overtime wages should necessarily be considered. Only those allowances should not be taken into account for those who are reimbursed, i.e., traveling allowances.
Thanks & Regards,
Sumit Kumar Saxena
9899669071
From India, Ghaziabad
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Greetings for the day.
For coverage of an employee under the ESIC scheme, the overtime wages should necessarily be considered. Only those allowances should not be taken into account for those who are reimbursed, i.e., traveling allowances.
Thanks & Regards,
Sumit Kumar Saxena
9899669071
From India, Ghaziabad
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Dear Suneetha,
The person is getting a salary of 10,000/- per month, but he does overtime and earns an extra 7,000/-. The ESIC will deduct on 17,000/- because he is also covered by ESIC when he does overtime. In the next month, he may receive 10,000 + 3,000 (overtime), then the ESIC will deduct on 13,000/-. When an ESIC inspector audits your firm, he will review all your ledgers and accounts. If he finds overtime accounts and if you do not deduct the ESIC contribution on those wages, he will collect a 6.50% contribution from your firm. So, I advise you to please deduct the ESI on overtime wages.
Thanks,
Pawan Bhatia
09812585353
From India, Bahadurgarh
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The person is getting a salary of 10,000/- per month, but he does overtime and earns an extra 7,000/-. The ESIC will deduct on 17,000/- because he is also covered by ESIC when he does overtime. In the next month, he may receive 10,000 + 3,000 (overtime), then the ESIC will deduct on 13,000/-. When an ESIC inspector audits your firm, he will review all your ledgers and accounts. If he finds overtime accounts and if you do not deduct the ESIC contribution on those wages, he will collect a 6.50% contribution from your firm. So, I advise you to please deduct the ESI on overtime wages.
Thanks,
Pawan Bhatia
09812585353
From India, Bahadurgarh
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Dear Friends,
I do agree with Mr. Madhu's view. If an employee draws below Rs. 14,999/- gross wages, he is covered under ESIC. If he earns an additional Rs. 7,000/- as OT, even for that, you have to pay ESI contribution. Only Washing allowance is excluded from ESI contribution.
G.K. Manjunath
Manager-HR
From India, Bangalore
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I do agree with Mr. Madhu's view. If an employee draws below Rs. 14,999/- gross wages, he is covered under ESIC. If he earns an additional Rs. 7,000/- as OT, even for that, you have to pay ESI contribution. Only Washing allowance is excluded from ESI contribution.
G.K. Manjunath
Manager-HR
From India, Bangalore
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Dear Sunitha,
As per ESIC Act Regulation 14, there is a declaration - every person employed as an employee within the meaning of Section 2(9) of the Employees' State Insurance Act, 1948 on ................................ in this factory or establishment and in respect of a remuneration not exceeding Rs. 15,000/- (excluding remuneration for overtime work).
There is no further clarification required for OT as it is excluded for ESI.
Regards,
Tejal Shah
From India, Vadodara
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As per ESIC Act Regulation 14, there is a declaration - every person employed as an employee within the meaning of Section 2(9) of the Employees' State Insurance Act, 1948 on ................................ in this factory or establishment and in respect of a remuneration not exceeding Rs. 15,000/- (excluding remuneration for overtime work).
There is no further clarification required for OT as it is excluded for ESI.
Regards,
Tejal Shah
From India, Vadodara
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