ESI wage ceiling enhanced to Rs 21,000
The Ministry of Labour and Employment has, by way of a gazette notification, enhanced the ESI wage ceiling from Rs 15,000 per month to Rs 21,000 per month. This comes into effect from 01-Jan-2017.
As you are aware, the current limit is Rs 15,000 – in other words, employees who draw an ESI wage of more than Rs 15,000 cannot come under ESI currently. With effect from 01-Jan-2017, employees drawing an ESI wage of up to Rs 21,000 will need to become ESI members.
As far as your organization is concerned, you may see some of the current employees (whose salary is between Rs 15,000 and Rs 21,000) getting into ESI for the first time on account of the wage ceiling enhancement. Also, there could be an increase in the cost to company on account of employer ESI contribution to such employees (who get added to ESI).
Please implement this in payroll with effect from January 2017. Kindly consider the new wage ceiling for final settlement processing too.
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Thanks for the information.
Give me more updates if any.
Thanks & regards,
J. Bordolaye.
one contractor is paying wages as Rs.15000 basic+Rs.6000 DA, to its employees, and submitting a declaration that PF & ESI is not applicable.
Please advise that :
a.does the PF and ESI deductions are applicable on this salary or not.
b. what should be minimum basic or salary to get leverage of exemption from PF&ESI contribution.
1. Please examine the legal basis on which the contractor claims that PF & ESI are not applicable. During the normal course, PF and ESI are applicable and cannot be avoided.
2. PF is mandatory up to a salary (gross pay minus HRA) of Rs 15,000 per month. The wage ceiling for ESI is Rs 15,000 (Rs 21,000 from 01-Jan-2017) as of Dec 2016.
my Employer paying Gross salary is 18,300 and my net salary is 15000 is mandatory to deduct ESI.
ESi is mandatory for your salary.
Hello,
My question is what are the components included in ESIC wages?My company includes Basic Salary,Allowances,Employer contribution to PF,PF admin charges,Gratuity and Employer contribution to ESIC in ‘Gross salary’
Please advice is it correct definition of ESIC wages?
Reply soon as I need to arrive at number of new employees as per revision in Threshold limit from 15000 to 21000.
Thank you.
Regards,
Sonali
Wages for the purpose of ESI should not include Employer PF and gratuity. In your organization’s case, Basic and Allowances should be looked at for ESI. However, please check if any of the allowances your organization pays is an exempted allowance under ESI rules. The below link may help:
http://www.esic.nic.in/wages.php
my salary is rs.15900 p.m. since april 2016, and i was not eligible for esi, and i am not paying esi, now if the limit of esi has been increased from 15000 to 21000/ pm ,
my request is, sir,
whether i have to start the contribution from jan. 2017 or from april 2017.( i am employed in punjab, in school, where total employees are 14, and employees having income below 15000/ pm already contributing to esi. )
pl clarify at the earliest.
thanks
with regards
Amarjit Singh
Yes, you have to start contributing to ESI from Jan 2017 since your salary is less than Rs 21,000.
Sir,
Due to new rule of esi increased to 21000, my employer revised my salary structure without increasing my CTC to employer esi contribution part. Due to this my salary is reduced by both employee & employer contributions from my side.
Please confirm is government strictly told to employers to increase CTC for their contribution part or employer cam adjust from salary structure without increase ctc for their benefit.
The government has said nothing about increasing the CTC. You could check with your employer on whether they can increase the CTC to cover the additional employer ESI contribution.
Do we have to deduct ESIC of Dec 16 month with limit upto 21k or not??
No, the wage limit until Dec 2016 was Rs 15,000 and hence the Rs 21,000 limit is not applicable for Dec 16.
Sir my CTC IS 22000 per month is PF AND ESIC MANDATORY FOR ME ? If yes then what % age of deduction is mandatory for the same?
1. If your ESI wage is more than Rs 21,000 per month, you will be getting out of ESI.
2. If your salary is more than Rs 15,000 per month, you can get out of PF, subject to conditions.
Hey
My Salary is about 18k which is in-hand. My company is deducted ESI amount 6.25% from my salary of two months which is 2340. Is It correct the whole deduction is from my salary?
I’m confuse please clarify this what is the procedure!
I’m not getting any Pf or anything only ESI which is applicable from now a days.
We need the salary break-up in order to be able to answer this question.
Sir,
We are private limited company. We have more than 300 workers and we have our own PF & ESI code. Now we are going to take one particular job as sub contract from one contractor. (He takes that job from his principle employer) So there are 3 parties. 1.Principle employer 2. Contractor 3. Subcontractor (We)
In Sub-Contract agreement our contractor agreed to pay ESI & PF liabilities of our employees thro his employer code. So when we raise bill for the work performed by our labor we will not include ESI & PF due of our labors. our contractor will pay them to government directly thro his code by his bank account and he will keeps all record of books. we will pay our labors salary thro our bank CC A/c by NEFT and will mention that as ‘salaries & Wages’ in our Profit & Loss A/c.
So In future if our contractor fails to pay ESI & PF due are we responsible to pay that ? I mean If our contractor fails to pay ESI & PF due, can ESI & PF authorities questions us? pls kindly clear me…..
Thanks in advance
Please ensure that the process with regard to PF deduction and remittance (involving your contractor) is well defined. The typical process is that you deduct PF from your employees and then pay both employer and employer contribution and the admin charges to your contractor. Your contractor finally makes the PF remittance for your employees. Please ensure that you maintain the records with regard to PF deduction and transfer of PF amount to your contractor. Also, please request your contractor to submit proof of PF remittance to you.
You need to have a well defined process even for ESI.
In case the contractor fails to pay statutory dues, you should be able to produce the records related to statutory deductions and transfer of the amounts to the contractor for remittance.
if employer doesn’t contribute to esi, whether it can be debited from employee salary
No
hey
sir my salary is ctc 22000 and after deduction of epf its around 18 k per month … so since my ctc is above 21k still my company deduct esic ……… plzz clear that esic deduction takes places on ctc or in hand salary ???
If the CTC amount includes Employer PF, then you will come under ESI.
For eg, If an employer increased the salary from 21,000 to 22,000 in the month of July 2017.
– Do ESIC is valid in July 2017?
– If yes, till which month? Employee contribution of 1.75% will be calculated for 21,000 or 22,000?
Thanks,
1. The employee is to be covered under ESI in July 2017.
2. Coverage is to be continued with until SEP 17.
3. ESI is to be calculated on Rs 22,000.
SIR I AM NOT AWARE ABOUT ESIC INCREASE LIMIT IN THAT CASE WHAT SHOULD I DO. SHOULD I DEDUCT ESIC FROM THIS MONTH (JULY OR FROM JANUARY )
You can implement it from July However, you may have to remit the ESI amount for the period from Jan along with penalty.
Sir
In case Employer deducts ESI contribution from the Employees whose monthly salary is more than Rs. 22000.00 per month due to wage revision (Out of the contribution period), please clarify the following:
1. Whether the deducted amount can be deposited in ESI account
2. If deposited, can the employee seek ESI benefits in case claim arises.
3. Is it not illegal for the Employer to deduct ESI contribution from whom who are out of ESI.
Please clarify
Thanks
It is not legal to continue with ESI once an employee is out of the ESI net.
Dear Sir
We are a contractor company employing around 250 workers. We are deducting PF of all workers on mandatory basis. Also having Workmen Insurance Policy for all of them. I am in Dilemma whether ESI to be deducted or it’s applicability is mandatory for us or contractors??
ESI coverage is mandatory in case your location is covered under ESI. In case ESI is unavailable in the geographical area of your operation, then you can cover employees under workmen policy.
My employees annual CTC is 2,60,000. If in any of the months he/ she is on LWP or may be due to any other deduction, gross is below 21K. Do the employer need to deduct the ESIC for that particular month.
No
My salary was revised above 21000 in the moth of May. My employer says Eventhough my salary was revised ,ESI detection will continue until october . is it true?
Your employer is correct in this regard.
Hi,
Please explain if my ESIC calculation is correctly calculated or not.
My salary break up is as below:
Basic:8520
HRA:3834
conveni:800
Uniform all:1250
Special allow:5324
PF:1022
Gratuity:410
Mediclaim:140
Hence my CTC is 255600/- per year. This is my revised salary break from Oct 2017 and Monthly calculation is 21300/-. My Company included me in ESIC policy and I am not sure of it. Please explain the correct calculation
Your total ESI wage (after excl PF, gratuity and insurance) is less than Rs. 21,000 and hence you come under ESI.
sir my CTC is 24358 RS. after increment from sep 17.
structure is- Basic-10025
HRA- 4513
bonus- 1890
conveyance all- 3600
special allowance- 836
Gross salary——20864
whether i come inder ESI scheme.
You are eligible for ESI.
ESIC rules revised from Jam 2017 at that time my gross salary was 20895 Rs. So My company has stated esic deduction to my salary from apr 2016.
Is it right or wrong? Because rules is revised from Jan 2017. So i am eligible but from jan 2017.
I have a confusion so please anybody let me reply,
You are eligible for ESI only from Jan 2017.
Dear Sir,
Pls help me out with my ESI calculation. My CTC is 19k, my net salary is around 16k. what is the % of ESI deduction and the procedure?
Thanks & regards
Jamuna
Employee ESI contribution = 1.75% of the wages
my monthly salary is 22000 I am eligible for ESI deduction or not??
No, you are not eligible.
is it mandatory esic to epf contributors whose salary is below 15000.
Yes it is mandatory, unless your company is exempted from PF.
My salary was 21600 until April 2017 was I applicable for esic deduction for those 3 months Jan feb n March
What was your salary in the month of Oct 16? If your ESI wage in Oct 16 was less than Rs 21,000, you were eligible to be covered under ESI until March 2017.
Sir/mam,
I want to know in my case currently I m getting gross salary below 21000, deduct ESI as per act norms but during between I got increment and my gross salary more than 21000. Whether I m eligible to deduct ESI .
Because I don’t want to deduct.please let me any one whether it is mandatory for a company to deduct ESI IN MY CASE.
PLEASE REPLY AS SOON AS
ESI deduction is mandatory if your company is registered with ESI. There is no possibility of opting out of ESI if your salary is below Rs 21,000.
Hello,
Our Management has been excluded 5 to 6 employees( whose CTC range between 18000 to 19000 thousand) from the bracket of ESI 21,000/- ceiling bracket (w.e.f Jan 2017) in this regards Management has cleared that they are providing mediclaim benefits to the employees, so why should opt ESI schemes now question arises.
1. Whether above figured employees are part of ESI coverage?
2. If, yes what would be appropriate step to avail the ESI and Rs. 21,000/- ceiling bracket.
Salary structure:-
Basic salary- 8900/-
HRA -2670/-
Transport allowance-1500
PF- 1068/-
special allowance-2862
Total CTC- 17000/-
Please do reply as this may be useful for them who are actually seeking.
1. Whether above figured employees are part of ESI coverage?
Ans: They have to come under ESI even if your management has taken Mediclaim policy for such employees.
2. If, yes what would be appropriate step to avail the ESI and Rs. 21,000/- ceiling bracket.
Ans: Such employees should be brought under ESI.
Sir,
My Gross salary is 22100.
Basic-10000.00
Travelling-3000.00
Incentive-5100.00
Project Allowance-4000.00
I am getting in hand 20900.00 after deduction of PF.
Am i eligible for ESIC??
Please suggest..
You are not eligible for ESI.
My total CTC consists of
Basic-134299
Hra-67150
Lta-13435
Medical-15000
Shift allowance-24000
Company contribute to pf-16116
Total ctc-270000
Deduction as follows
Employee Pf contribution-16116
Employers PF contribution-16116
Professional tax-200
Net take home is 19614
Am I eligible for esic???
Are these monthly or annual figures?
Annual figure!
Monthly salary is 22500 and my in-hand is 19614.
Deduction are all meintioned above.
Yes, you are.
My ctc is above 21000. And gross salary is approx 19000. I want to stop my esi deduction. Is this possible or not?
Not possible.
Dear Sir
My current gross salary is Rs.19009/- . If my salary will increased above Rs.21000/- from April-2018, then can I exit from ESI as i dont want to stay under ESI scheme.
And my employer can deduct ESI amount from salary then.
Please suggest
Yes, you will be out of ESI from Apr 2018.
Sir in my gross salary medical allowance of 300 rupees is included and my gross salary is less than 21000….now my company is deducting esi from my gross and deducting the medical allowance….is it correct??…will i not get the medical allowance?…is there any written rule about this?
Are you saying that there is a deduction called medical allowance?
My Salary Break up
Basic 16198.00
HRA 5000.00
Overtime aprx 2600.00 Gross is 23798.00 I am seeking to know that is ESI deduction mandatory?
You are out of ESI coverage since your salary is more than Rs 21,000 per month.
Sir,
one of the employee salary 18000 in the month of November increased salary in December month that is 23000 so employee esi continued or discontinue ?
if continue esi basic 21000 or 23000.
if discontinue which code use in excel format?
You should continue until the end of the six month period (until March). You can discontinue from April. The ESI wage shall be Rs 23,000 in December.
Sir, if my salary is exact 21000,still my esi will be detected?Please let me know urgent.
Yes, ESI should be deducted up to a monthly salary of Rs 21,000.
Hi Sir,
As I already know that esic wages has been raised from 15k to 21 k but I just want to know like if my annual ctc is 3 lacs then it still impact on esic wages or not!
If you salary is more than Rs 21,000 per month, you will be out of ESI.
My salary was 18000 and it got hiked on 5th march 2018 to 24000/-,Will there be any ESI deduction for me in this month??
No, there should be no ESI for you this month.
My company has truck drivers where their pay is as per KM driven. For example, if a driver is working in a month for 26days, he earns more than 25,000. If he goes on leave for 15 days or so, and has worked only for 10 days, his pay would be in 12,000. In that case, is this driver eligible for ESI?
If the employee’s ESI wage is less than Rs 21,000, the employees should be covered under ESI.
sir i want to confirm if my esi deduction is applicable on gross salary or ctc.. My take home is 18500p.m gorss-20600 ctc23300 p. M.. Is e. S. I deduction applicable?
ESI should be deducted on gross.
Sir my gross selrey 22600 and in hand take home selrey 20500 iam eligible for esi yes ya no
If your fixed gross is less than Rs 21,000 per month, you will come under ESI.
Sir my gross salary is 22500 & net salary is 21000 & Ctc is 23610 i, m eligible for esi yes or no
You are out of ESI. I presume all the heads of pay in your gross are those that are included for ESI.
hi,
i got increment feb 2019 and my salary gross is before 18145/- but now increased 21350/- . is it again i has to pay ESI AMT??? or no need to cut
please suggest me
ESI shall be deducted from your salary until Mar 2019. You will be out of ESI from Apr 2019.
Is Employer contribution to ESI part of taxable salary?
No
Need few clarification reg ESI Contribution,
1. Is ESI Contribution part of my CTC are included in Gross Earninxg.?
2. If it’s included in CTC. if I’m being opted out of ESI since crossed 21K monthly.. What will happen to the contribution.. Will be be added to my fixed allowance making it part of Gross Earning.?
Looking forward to your answers pls.
1. Is ESI Contribution part of my CTC are included in Gross Earninxg.?
Ans: No.
2. If it’s included in CTC. if I’m being opted out of ESI since crossed 21K monthly.. What will happen to the contribution.. Will be be added to my fixed allowance making it part of Gross Earning.?
Ans: Organizations typically do not add the ESI contribution to any other head of pay in the event of an employee getting out of ESI.
Thanks for the immediate response..
Just out of topic question…
Which is lot easier for an employer defining the salary structure.,
Defining by CTC and arriving at breakup of components (or) Defining the Gross Earning of the employee and arriving at the CTC.?
If going by the second approach., the CTC dynamically changes for any employer contribution addition or deletion..
can you suggest the best which will ease employer operation.?
Companies typically arrive at a cost to company for each employee and break the amount up for different heads of pay.