Esi contribution
This query is : Resolved
31 August 2017
What is Government Contribution in ESI which when added up with the Employer Contribution equals 4.75% of the Monthly Wages. Is there any formula to compute such Govt. Contribution.
31 August 2017
There is no Govt Contribution. 4.75% is done entirely by Employer.
Refer link for sample calculation https://www.easycalculation.com/finance/learn-esi-calculation.php
Refer link for sample calculation https://www.easycalculation.com/finance/learn-esi-calculation.php
31 August 2017
Thank You Sir
But I have got the reply from my friend who explained that in case an employee is disabled then the entire 4.75% employer's share will be borne by Govt. and not the employer and the same will be reflected as Government Contribution in the ESIC Contribution history on the website.
21 July 2024
In the context of Employees' State Insurance (ESI) contributions in India, the total contribution comprises of three components: employee contribution, employer contribution, and government contribution. The employer and employee contribute a fixed percentage of the employee's wages towards ESI, and the government also contributes towards the scheme.
Here’s how the contributions are structured:
1. **Employee Contribution**: Currently, employees contribute 0.75% of their wages towards ESI.
2. **Employer Contribution**: Employers contribute 3.25% of the employee's wages towards ESI.
3. **Government Contribution**: The government contributes 1.75% of the employee's wages towards ESI.
To compute the government contribution when added to the employer contribution equals 4.75% of the monthly wages, you can use the following formula:
\[ \text{Government Contribution} = \text{Total ESI Contribution} - \text{Employee Contribution} - \text{Employer Contribution} \]
Given:
- Total ESI Contribution = 4.75% of Monthly Wages
- Employee Contribution = 0.75% of Monthly Wages
- Employer Contribution = 3.25% of Monthly Wages
Substitute these values into the formula:
\[ \text{Government Contribution} = 4.75\% - 0.75\% - 3.25\% \]
\[ \text{Government Contribution} = 1.75\% \]
Therefore, the government contributes 1.75% of the employee's monthly wages towards ESI. This contribution is fixed and does not vary based on individual wage levels but rather as a percentage of the total wages covered under ESI for all eligible employees.
Here’s how the contributions are structured:
1. **Employee Contribution**: Currently, employees contribute 0.75% of their wages towards ESI.
2. **Employer Contribution**: Employers contribute 3.25% of the employee's wages towards ESI.
3. **Government Contribution**: The government contributes 1.75% of the employee's wages towards ESI.
To compute the government contribution when added to the employer contribution equals 4.75% of the monthly wages, you can use the following formula:
\[ \text{Government Contribution} = \text{Total ESI Contribution} - \text{Employee Contribution} - \text{Employer Contribution} \]
Given:
- Total ESI Contribution = 4.75% of Monthly Wages
- Employee Contribution = 0.75% of Monthly Wages
- Employer Contribution = 3.25% of Monthly Wages
Substitute these values into the formula:
\[ \text{Government Contribution} = 4.75\% - 0.75\% - 3.25\% \]
\[ \text{Government Contribution} = 1.75\% \]
Therefore, the government contributes 1.75% of the employee's monthly wages towards ESI. This contribution is fixed and does not vary based on individual wage levels but rather as a percentage of the total wages covered under ESI for all eligible employees.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- RCM INVOICING FROM NOV-2024
- Confusion around Form 26QB fields
- Tds on building rent monthly
- Sale of property furniture sale
- Applicability of Tax audit u/s 44AB of income tax act, 1961
- Question about eligibility for tax rebate u/s 87A
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- BUYING PROPERTY COULD NOT FILE 26QB
- Gst input for FY 23-24
- Regarding Waiver of Interest levied u/s 50 of PGST/CGST Act
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- GST Regis.
- IGST Credit-Show cause notice issued-confusion
Trending Online Classes
CAclubindia
