@ Rajeeta Das,
Your answers below.
Ans for Point 1) : So both allowance are part of monthly salary & hence part of Gross Salary. & if Gross is below 15000/- ESIC is applicable as per your given components. 6040 + 3020 + 800 + 1250 + 3390 = Total Gross 14500. ESIC Applicable
Ans. For Point 2) Gross Salary + Employer's contribution (ESIC, PF, LWF etc) = CTC. Keep this equation in your mind to make payroll process easy. As in Monthly Payslip you will indicate Gross Salary - Employee's contribution (ESIC, PF, LWF etc) = Nate take home Salary.
So, Design Package of Employee by keeping Gross salary in your mind + Contribution of Employer to decide monthly CTC.
Main Answer of Topic "Regarding ESIC Deduction"
1) If in your organization 10+ Employees are employed & all 10 are below 15000 Gross then ESIC is applicable, & Once Applied you can not remove ESIC applicability from your Organization if Employee Strength going down to 10 Nos.
2) Only if the employees Gross salary reached above ceiling limit (15000) after ending of "Contribution period" (1st April - 30th Sept & 1st Oct to 31 March) you can remove Employee out of ESIC coverage.
I hope it will help you.
From India, Ahmedabad
32Your answers below.
Ans for Point 1) : So both allowance are part of monthly salary & hence part of Gross Salary. & if Gross is below 15000/- ESIC is applicable as per your given components. 6040 + 3020 + 800 + 1250 + 3390 = Total Gross 14500. ESIC Applicable
Ans. For Point 2) Gross Salary + Employer's contribution (ESIC, PF, LWF etc) = CTC. Keep this equation in your mind to make payroll process easy. As in Monthly Payslip you will indicate Gross Salary - Employee's contribution (ESIC, PF, LWF etc) = Nate take home Salary.
So, Design Package of Employee by keeping Gross salary in your mind + Contribution of Employer to decide monthly CTC.
Main Answer of Topic "Regarding ESIC Deduction"
1) If in your organization 10+ Employees are employed & all 10 are below 15000 Gross then ESIC is applicable, & Once Applied you can not remove ESIC applicability from your Organization if Employee Strength going down to 10 Nos.
2) Only if the employees Gross salary reached above ceiling limit (15000) after ending of "Contribution period" (1st April - 30th Sept & 1st Oct to 31 March) you can remove Employee out of ESIC coverage.
I hope it will help you.
From India, Ahmedabad
Dear Ranjeeta,
With reference to all above posts I would like clarify your problem in following way.
1) You have appointed new employee on per month wages Rs 15100.(With reference your previous post) now employee whose gross salary is 15000 or less than 15000 will eligible for ESIC. In your case if he is getting Rs 15100/- per month then he is not eligible for ESIC. Washing allowance is exempted from ESIC deduction.
2) Second query is that you have 33 nos of employee and none of them is getting salary 15000 or less than that. As per nature of your organization your firm falls under Shop and Establishment act. So as per ESIC act 1948 there should be minimum 20 employee drwaing gross wages 15000 or less than that. So ESIC is not applicable to your firm.
From India, Pune
With reference to all above posts I would like clarify your problem in following way.
1) You have appointed new employee on per month wages Rs 15100.(With reference your previous post) now employee whose gross salary is 15000 or less than 15000 will eligible for ESIC. In your case if he is getting Rs 15100/- per month then he is not eligible for ESIC. Washing allowance is exempted from ESIC deduction.
2) Second query is that you have 33 nos of employee and none of them is getting salary 15000 or less than that. As per nature of your organization your firm falls under Shop and Establishment act. So as per ESIC act 1948 there should be minimum 20 employee drwaing gross wages 15000 or less than that. So ESIC is not applicable to your firm.
From India, Pune
1. Sir, I may request Sh. Mahesh3328 to kindly intimate as to how the software development units are treated as "shops and establishments" and not "factories" ? Is there any provision under ESI Act, 1948 or are there any instructions issued by the said Department ?
2. Further I will also request Mahesh3328 to kindly elaborate his views that "So as per ESIC act 1948 there should be minimum 20 employee drwaing gross wages 15000 or less than that. So ESIC is not applicable to your firm".
3. I hope the above contributor will like to elaborate his above views with reference to provisions of ESI Act, 1948 and rules/regulations framed thereunder. This is required so that I may up-date myself so far as provisions of above Act and compliance thereunder is concerned.
From India, Noida
2. Further I will also request Mahesh3328 to kindly elaborate his views that "So as per ESIC act 1948 there should be minimum 20 employee drwaing gross wages 15000 or less than that. So ESIC is not applicable to your firm".
3. I hope the above contributor will like to elaborate his above views with reference to provisions of ESI Act, 1948 and rules/regulations framed thereunder. This is required so that I may up-date myself so far as provisions of above Act and compliance thereunder is concerned.
From India, Noida
Dear Mahesh3328,
In the ruling in The Assistant Director, ESIC v. M/s Western Outdoor Interactive Pvt. Ltd. & Oth, while determining the applicability of the ESI Act to a software company, the Bombay High Court took a view that software development is a manufacturing process and the premises where computers are involved in such a manufacturing process is a factory for the purposes of the ESI Act.
However, this judgment is unlikely to effect on coverage of software establishments significantly since most of the States have already issued notifications covering various 'shops' and/or 'commercial establishments' within the scope of the ESI Act, and most IT/ITeS establishments are therefore already covered.
It seems you are either from Maharashtra, HP or Assam and you are following the law in force or practiced in your State for shops and commercial establishment. Please note that ESI law in other States in regards to its applicability to shops and commercial establishment is different. This issue is discussed in this forum on number of occasions.
From India, Mumbai
In the ruling in The Assistant Director, ESIC v. M/s Western Outdoor Interactive Pvt. Ltd. & Oth, while determining the applicability of the ESI Act to a software company, the Bombay High Court took a view that software development is a manufacturing process and the premises where computers are involved in such a manufacturing process is a factory for the purposes of the ESI Act.
However, this judgment is unlikely to effect on coverage of software establishments significantly since most of the States have already issued notifications covering various 'shops' and/or 'commercial establishments' within the scope of the ESI Act, and most IT/ITeS establishments are therefore already covered.
It seems you are either from Maharashtra, HP or Assam and you are following the law in force or practiced in your State for shops and commercial establishment. Please note that ESI law in other States in regards to its applicability to shops and commercial establishment is different. This issue is discussed in this forum on number of occasions.
From India, Mumbai
Hi,
As per my understanding, Monthly Gross Salary lesser than 15,000/- or CTC lesser than 15,757/- are covered under ESIC. in this case where the gross salary is 15100/- ESIC shall not be applicable.
Regards
Bharath
From India, Bangalore
As per my understanding, Monthly Gross Salary lesser than 15,000/- or CTC lesser than 15,757/- are covered under ESIC. in this case where the gross salary is 15100/- ESIC shall not be applicable.
Regards
Bharath
From India, Bangalore
Dear Bharath ji, I read your respose and confused myself as to am I making a conceptual mistake in Law or what? From what source you got this information Sir?
From India, Mumbai
From India, Mumbai
Let me intervene with my opinion that first of all the company is under ESI coverage because the number of employees exceeds 10/20. It is immaterial if all of your employees get more than Rs 15000 and, therefore, are not covered, but for the purpose of coverage of establishment, only the number and not the salary is taken into account and as such your company is covered from the date on which your number of employees became 10/20, as the case may be.
Now coming to the question of employees' salary, I feel that the medical is not allowance but is a reimbursement and as such will not form part of salary at all. Therefore, you have to deduct Rs 1250 from the Gross salary (there is still some 600 missing!) and the remaining only is the ESI qualifying salary. The salary being Rs 13850 (15100-1250), the employee is covered under ESI.
What is PF additional charges?
Madhu.T.K
From India, Kannur
Now coming to the question of employees' salary, I feel that the medical is not allowance but is a reimbursement and as such will not form part of salary at all. Therefore, you have to deduct Rs 1250 from the Gross salary (there is still some 600 missing!) and the remaining only is the ESI qualifying salary. The salary being Rs 13850 (15100-1250), the employee is covered under ESI.
What is PF additional charges?
Madhu.T.K
From India, Kannur
Dear Madhu ji,
With due respect to you Sir -
What you say is not correct in Maharashtra, HP and Assam as per my knowledge.
According to me if medical allowance or reimbursement is paid alongwith salary every month, ESI will attract on it.
I may be wrong and subjected to be corrected.
From India, Mumbai
With due respect to you Sir -
What you say is not correct in Maharashtra, HP and Assam as per my knowledge.
According to me if medical allowance or reimbursement is paid alongwith salary every month, ESI will attract on it.
I may be wrong and subjected to be corrected.
From India, Mumbai
Friends, In case of coverage of factories, ESI law is uniform through out the country, according to my limited knowledge. Members are requested to correct me if I am wrong.
From India, Mumbai
From India, Mumbai
You are right. But reimbursements are not usually paid along with salary but it is 'reimbursed' on production of bills and that is why it is put separate in the income tax calculation and made non taxable. If it is paid along with salary it should be medical allowance and not reimbursement and that will attract tax also.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
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.
Bombay Anand Bhavan Restaurant-vs- ESIC SC 2-09-2009.pdf
PMRPY-DEDUCTION -SOLUTION.xls
ESIC Amendment.doc