ESI deduction Rules - employee salary.. CiteOps
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ESI deduction Rules

forpoojasaxena@gmail.com Started The Discussion:

Dear Madam/Sir,

Please guide me if Basic+HRA is more than or equals to Rs7500/- does ESI deduction has to be made.

And please also tell me does we take into account HRA & Convenyce while calculating ESI.


regards
pooja

Prakash Dixit - Member Since: Jun 2008
Dear pooja,

Please note that the ESI limit is not Rs. 7500/- but has been increased to Rs. 10,000/- w.e.f. 1.10.2006.

As per Section 2(22) of ESI Act, Wages means all remuneration paid or payable incash to an employee. This includes HRA & conveyance as well.

rashmi8767 - Member Since: Jul 2008
Hi! Pooja,

For ESIC you have to consider all the fixed components of your monthly salary. You should not include any variable components.

I believe the ceiling for ESIC has been raised to Rs. 10000/-. Am not too sure on this but you could get the same confirmed.

Regards,

Rashmi

mathampallyms - Member Since: Jun 2008
:)The limit has been enhanced to Rs. 10,000/- p.m. excludes washing allowance if any from the gross. Variable components like OT to be included for payment of ESI deduction but not for the eligilibility clause.

krishna_k - Member Since: Jul 2008
ESI is calculated on gross i.e basic,DA,hra,Conveyance and any other components as part of salary. The cealing 10,000/- and not 7,500/-. employee contribution is 1.75% of the gross and employer contribution is 4.75% of the gross.
regds
Krishna

kaleemsyed - Member Since: Jul 2008
ESI will get covered if the number of Employees equals to 10 or more if operating with the aid of power and 20 employees are more ( without power)
We are a software company , for us the limit of 10 will apply of limit of 20 will apply
Pls clarify

Kaleem

amol dhepe - Member Since: Jul 2008
:)Hi Kleemsyed,

As your company is software company, you will get coverage under ESIC if total number of employees in your company is more than or equal to 20. Also the rule of salary limit is applicable.

prachi.arya6@gmail.com - Member Since: Jun 2008
Dear Pooja, ESI is applicable upto the salary limit of 10000 .All the emplyees whome monthly income(gross) is lesss than or equall to 10000 are cover under it. Regards Prachi

kaleemsyed - Member Since: Jul 2008
Thanks for the clarification Anmol

The plain reading of the act says if the number of employees 10 or more and if you are operating with the use of Power, We get covered.
When you say operating with power. we are also using power in the sense that for running the computers and airconditioners and lighting .

What is the right interpertion of phrase ' with the use of power and without the usage power contemplated by the ESI Act

Kaleemsyed

rajeshchopra01 - Member Since: Jun 2008
Hello Puja ESI deduct if total salary (included basis, HRA,Conv.) is Rs. 10000/- or less. HRA & Conv. if received if monthly salary than must be calcuting ESI. regard rajesh



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