In case of PF deduction, the limit is 12% contribution (Rs.780/-) probably by both the employer and employee unless both or either want to contribute more.
Is there any provision for the maximum deduction for ESI when wages exceed the limit of Rs.15,000/- per month.
From India, Jamnagar
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Is there any provision for the maximum deduction for ESI when wages exceed the limit of Rs.15,000/- per month.
From India, Jamnagar
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Hi Dadusha,
First of all, for PF, it's not maximum or minimum; it's just 12% and not limited to Rs. 780. It's rather optional to contribute above this amount if the employee's basic is more than Rs. 6500. The employer can restrict the basic for PF at Rs. 6500, but nowadays in most companies, both the shares, i.e., the employee's share as well as the employer's share, are a part of CTC. Even the employers do not restrict it to the basic of Rs. 6500, but it is to be at 12%. The major benefit of higher contribution goes to the employee because the PF contribution is non-taxable when it comes to filing IT returns.
As far as ESI is concerned, please be informed that in a recent development, the ESIC has increased the upper limit of wages covered for ESI deduction from Rs. 15,000 to Rs. 25,000. However, in case the employee's consolidated salary reaches beyond the maximum wages, i.e., Rs. 25,000, it doesn't remain compulsory for the employer to keep contributing. The names of such employees whose wages cross the maximum salary can be shown in the next ESI returns.
Raj
From India, Delhi
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First of all, for PF, it's not maximum or minimum; it's just 12% and not limited to Rs. 780. It's rather optional to contribute above this amount if the employee's basic is more than Rs. 6500. The employer can restrict the basic for PF at Rs. 6500, but nowadays in most companies, both the shares, i.e., the employee's share as well as the employer's share, are a part of CTC. Even the employers do not restrict it to the basic of Rs. 6500, but it is to be at 12%. The major benefit of higher contribution goes to the employee because the PF contribution is non-taxable when it comes to filing IT returns.
As far as ESI is concerned, please be informed that in a recent development, the ESIC has increased the upper limit of wages covered for ESI deduction from Rs. 15,000 to Rs. 25,000. However, in case the employee's consolidated salary reaches beyond the maximum wages, i.e., Rs. 25,000, it doesn't remain compulsory for the employer to keep contributing. The names of such employees whose wages cross the maximum salary can be shown in the next ESI returns.
Raj
From India, Delhi
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Dear Sir(s),
I would like to inform you that the Ministry of Labour & Employment, Government of India, has not yet issued a notification enhancing the wage ceiling under the Central Rules framed under the Employees' State Insurance Act, 1948. Therefore, the wage ceiling under the ESI Act, 1948, as of today, remains Rs. 15,000/-.
The contributing member mentioned above may kindly review this information and provide guidance if I am mistaken.
With kind regards,
From India, Noida
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965I would like to inform you that the Ministry of Labour & Employment, Government of India, has not yet issued a notification enhancing the wage ceiling under the Central Rules framed under the Employees' State Insurance Act, 1948. Therefore, the wage ceiling under the ESI Act, 1948, as of today, remains Rs. 15,000/-.
The contributing member mentioned above may kindly review this information and provide guidance if I am mistaken.
With kind regards,
From India, Noida
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The PF contribution of 12% of the salary is the minimum percentage. However, the employee and also the employer, if he wishes, can contribute over and above the rate of 12%. One can contribute up to 20% of the salary after completing certain formalities with the PF Office. In short, there can be a higher percentage of contribution, and the contribution can be over and above Rs. 6,500.
As regards ESI, I have sent a suggestion to the ESI Office to formulate the policy in such a way that all employees working in an establishment should be covered. However, the contribution shall be restricted to the maximum limit of the salary (presently Rs. 15,000, but likely to raise to 25,000). In other words, what I have proposed is that if an employee is deriving a salary of, say, Rs. 40,000 per month, then he should be covered under the ESI Scheme, but his contributions should be restricted to the limit, i.e., Rs. 15,000. So, he will be entitled to benefits of ESI up to 15,000 only. However, I have not received any reply from the ESI Corporation.
From India, Kolhapur
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As regards ESI, I have sent a suggestion to the ESI Office to formulate the policy in such a way that all employees working in an establishment should be covered. However, the contribution shall be restricted to the maximum limit of the salary (presently Rs. 15,000, but likely to raise to 25,000). In other words, what I have proposed is that if an employee is deriving a salary of, say, Rs. 40,000 per month, then he should be covered under the ESI Scheme, but his contributions should be restricted to the limit, i.e., Rs. 15,000. So, he will be entitled to benefits of ESI up to 15,000 only. However, I have not received any reply from the ESI Corporation.
From India, Kolhapur
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ESIC is computed on gross salary, not on a salary with a limit. Once the salary limit of 15000 is breached, the contribution will stop at the end of the 6-month contribution period. However, while it is paid, it will be on the actual limit.
From India, Mumbai
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From India, Mumbai
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Please, if you people cannot guide anyone, then stop sending these types of confusing posts. Who told you that ESI ceiling is enhanced to Rs 25000/-? Do you think that this website is the only platform to show that you are an all-rounder in HR? Enhancement is proposed, but the notification is not yet published. As far as my knowledge is concerned, so please do not confuse our friends, dear. You people are about to kill our friends who are seeking your valuable comments. His/her employer will kick him/her out if he proposes his/her employer to follow your rule. My dear friend RAJ.
From India, Kolkata
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From India, Kolkata
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Please do not circulate wrong information to new members or people who do not know about the subject matter. As Mr. Kamal Dutta said, it is still 15000. There should not be any confusion in this regard. Notification regarding the new ceiling is awaited.
From India, Delhi
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From India, Delhi
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Dadusha, do you want to inquire about the maximum limit of ESI coverage? If yes, then there is a maximum limit of Rs. 15,000 in the law. Individuals earning more than a gross salary of Rs. 15,000 are not eligible for ESI benefits. However, you may want to wait until the upcoming budget as this limit could potentially be increased to Rs. 25,000.
From India, Delhi
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From India, Delhi
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Dear Sir(s),
I would like to further clarify that the enhancement of the wage ceiling in Rule 50 of the ESI (Central) Rules, 1950 is carried out solely by the Ministry of Labour & Employment, Central Government, following the issuance of an intention notification for a period of 30 days. After the elapse of the 30-day period, the final notification is expected to be issued by the Central Government.
Based on the information available to me, it appears that the said Intention Notification has not yet been issued by the Central Government. Therefore, the enhancement of the wage ceiling under the ESI Act is anticipated only after the intention notification has been issued. I have noted in my remarks to be corrected if there are any errors.
With kind regards;
From India, Noida
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I would like to further clarify that the enhancement of the wage ceiling in Rule 50 of the ESI (Central) Rules, 1950 is carried out solely by the Ministry of Labour & Employment, Central Government, following the issuance of an intention notification for a period of 30 days. After the elapse of the 30-day period, the final notification is expected to be issued by the Central Government.
Based on the information available to me, it appears that the said Intention Notification has not yet been issued by the Central Government. Therefore, the enhancement of the wage ceiling under the ESI Act is anticipated only after the intention notification has been issued. I have noted in my remarks to be corrected if there are any errors.
With kind regards;
From India, Noida
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PAYMENT OF WAGES ACT 2009.doc