Dear Suneetha,
As Mr. Madhu told, overtime salary will not be considered for coverage decision, but will be considered for calculation of ESI deduction
If a person's gross salary is less than RS. 15000/-, then he is coverable under ESI and deductions to be done on his earnings including his Overtime & other earnings ( except washing allowances )
Regards
Amaravathy Srinivasan
From India, Coimbatore
As Mr. Madhu told, overtime salary will not be considered for coverage decision, but will be considered for calculation of ESI deduction
If a person's gross salary is less than RS. 15000/-, then he is coverable under ESI and deductions to be done on his earnings including his Overtime & other earnings ( except washing allowances )
Regards
Amaravathy Srinivasan
From India, Coimbatore
As per the esi emp those who are getting more then Rs 6500 per menth they will not elig to get treatment in esi.
From India, Coimbatore
From India, Coimbatore
Dear All,
Mr.Madhu has clearly explained the scope of ESIC coverage. As rightly pointed out by him OT is not considered for the purpose of considering the wages for deciding ESI coverage but while paying contributions the total wages (wages + OT) must be considered for payment of contribution.
The logic explained by ESIC officials is OT is not a permanent part of wage structure and can vary from month to month and in a given month if the employee exceeds the ESI limit while considering his OT as wages for the purpose of coverage, the subsequent month his wages can fall below the ESI limit and he will come under the purview of ESI cover. To enable the employee to enjoy uniform ESI benefit this provision is given. Moreover, by paying the ESI contribution on the maximum wages (Wages + OT) the employee benefits as this will be considered for arriving at the daily wage of the employee. Hence, it is deemed as a double benefit for the employee.
M.V.KANNAN
From India, Madras
257Mr.Madhu has clearly explained the scope of ESIC coverage. As rightly pointed out by him OT is not considered for the purpose of considering the wages for deciding ESI coverage but while paying contributions the total wages (wages + OT) must be considered for payment of contribution.
The logic explained by ESIC officials is OT is not a permanent part of wage structure and can vary from month to month and in a given month if the employee exceeds the ESI limit while considering his OT as wages for the purpose of coverage, the subsequent month his wages can fall below the ESI limit and he will come under the purview of ESI cover. To enable the employee to enjoy uniform ESI benefit this provision is given. Moreover, by paying the ESI contribution on the maximum wages (Wages + OT) the employee benefits as this will be considered for arriving at the daily wage of the employee. Hence, it is deemed as a double benefit for the employee.
M.V.KANNAN
From India, Madras
Dear Mr. Madhu T. K.,
Is it applicable for shops and establishment as well?
and what if the establishment is not a manufacturing unit meaning a service unit?
I am agreed with your answer and i have the same understanding but while i have confirmed with reliable resources it had been refused.
Can you please give me any notification regarding the same or any reference for the same?
--
Regards,
Hardik
From India, Chaklasi
Is it applicable for shops and establishment as well?
and what if the establishment is not a manufacturing unit meaning a service unit?
I am agreed with your answer and i have the same understanding but while i have confirmed with reliable resources it had been refused.
Can you please give me any notification regarding the same or any reference for the same?
--
Regards,
Hardik
From India, Chaklasi
DEAR FRIENDS As per the factory act 1948 the company have to pay esi to net amount which is received by the employee. duing the audit they will match the esi with emp net salary only.
From India, Coimbatore
From India, Coimbatore
Dear Suneetha,
In this case, I do agree with Mr. pawan.The person is getting salary 10000/- per month means its his CTC at which he was appointed and according to ESIC Act any one who is getting gross salary less than 15000/- will be covered under ESI. Now, he do the overtime and earns 7000/- extra but still he is eligible for deduction because what if does not over time next month and gets salary according to 10000/-. the person is covered under esic until his CTC gets more than 15000/-.
Thanks
Amit
Asst. Manager HR
From India, Amritsar
In this case, I do agree with Mr. pawan.The person is getting salary 10000/- per month means its his CTC at which he was appointed and according to ESIC Act any one who is getting gross salary less than 15000/- will be covered under ESI. Now, he do the overtime and earns 7000/- extra but still he is eligible for deduction because what if does not over time next month and gets salary according to 10000/-. the person is covered under esic until his CTC gets more than 15000/-.
Thanks
Amit
Asst. Manager HR
From India, Amritsar
ESI rules are same for factories and establishments. Only difference is with regard to coverage of the organisation that for coverage of factory only 10 employees are required whereas for coverage of a commercial establishment other than a factory, at least 20 persons are required. The ESI has instructed the state government to make it applicable to all 'establishments' employing 10 and by that it will become common to factories and establishments.
Dear Amit,
CTC is a concept recently developed and it has no legal validity. Therefore, don't take CTC for any calculation relating to ESI, PF or other statutory matters.
Regards,
Madhu.T.K
From India, Kannur
Dear Amit,
CTC is a concept recently developed and it has no legal validity. Therefore, don't take CTC for any calculation relating to ESI, PF or other statutory matters.
Regards,
Madhu.T.K
From India, Kannur
Dear Suneetha,
The ESIC act is clearly said that 15000/- salary per month is the cealing amount to deduct the ESI from the employees. Those who are all getting salary withing this limit you need to deduct ESI and if the employees are getting OT, we need to deduct ESI seperately on OT also. OT amount is not a factor to fix the salary to an employee. By seeing the salary itself we can decide whether this employee is coverd under ESI or not. Do not focus on OT.
Lakshmikanth.M
HR dept
From India, Bangalore
The ESIC act is clearly said that 15000/- salary per month is the cealing amount to deduct the ESI from the employees. Those who are all getting salary withing this limit you need to deduct ESI and if the employees are getting OT, we need to deduct ESI seperately on OT also. OT amount is not a factor to fix the salary to an employee. By seeing the salary itself we can decide whether this employee is coverd under ESI or not. Do not focus on OT.
Lakshmikanth.M
HR dept
From India, Bangalore
Dear All,
As Mr.Madhu has pointed out employees are covered under ESI upto Rs.15000/- and only if they earn more than Rs.15000/- say Rs.15001/- then they are outside the purview of ESI coverage.
Regards
M.V.KANNAN
From India, Madras
As Mr.Madhu has pointed out employees are covered under ESI upto Rs.15000/- and only if they earn more than Rs.15000/- say Rs.15001/- then they are outside the purview of ESI coverage.
Regards
M.V.KANNAN
From India, Madras
Dear Mr. Ponraji,
If you are providing Uniform to your employees and paying the reasonable amount washing allowance, that is exempted from paying ESI contribution. In our concern we have been paying Rs. 240/- per month and on that we have not been paying ESI.
This is for your information.
G.K.Manjunath,
Manger-HR
From India, Bangalore
If you are providing Uniform to your employees and paying the reasonable amount washing allowance, that is exempted from paying ESI contribution. In our concern we have been paying Rs. 240/- per month and on that we have not been paying ESI.
This is for your information.
G.K.Manjunath,
Manger-HR
From India, Bangalore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
ESIC Calculation.zip
SALARY SHEET CALCULATION.xls