When ESI is applicable to a organization. what is the percentage of ESI payable. Please state the way of calculation of ESI ?

Posted 2 years, 9 months ago by Enthusiasm to speak


ESI Act is applicable to employees getting gross salary less than or equal to Rs. 15,000 in establishments which employ more than 10 persons.

Employee Contribution = 1.75% on Gross

Employer Contribution = 4.5% on Gross

ESI has something called as Contribution period. There are 2 such periods for a FY

One starts on 1st April and another starts on 1st October

So applicability to an employee is for a  contribution period. ie if ESI act is applicable to an employee in a contribution period, it remains to be applicable through 
out that 6 month period irrespective of his Gross exceeding 15K 

 

 

Posted 2 years, 9 months ago by Half-God Half-Man


Small correction, employer contribution is  4.75% instead of 4.5%

Posted 2 years, 9 months ago by Half-God Half-Man


I think there is some upper limit for disabled employees. Can you clarify it and what is the limit?

Posted 2 years, 9 months ago by Rahul Rai


The wage ceiling for coverage under the ESI Act, for an employee under disability raised to Rs 25000/ month. However, employers have exemption from ESI Contribution for Max period of 3 years from the date of commencement of Contribution period.

Posted 2 years, 9 months ago by Half-God Half-Man


Thanks Vedanta for clearing my doubts. So, its like this for normal employees ESI is not applicable if salary above 15000 and for disabled its 25000.

Posted 2 years, 9 months ago by Rahul Rai


Welcome. Yes, for disabled employees, Employer & Employee has to contribute till the disabled person's salary is upto Rs 25000 in the contribution period. Subsequently , there is no liability on both

Posted 2 years, 9 months ago by Half-God Half-Man


Your Reply:

You need to be logged in to reply.