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ESI Applicability


Enthusiasm to speak

2014-07-13

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

Vedanta Deshika

2014-07-14

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 

 

 

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Vedanta Deshika

2014-07-14

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

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Rahul Rai

2014-07-14

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

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Vedanta Deshika

2014-07-14

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.

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Rahul Rai

2014-07-14

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.

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Vedanta Deshika

2014-07-14

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

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