Esic computation and limit

This query is : Resolved

Pradeep kumar (Querist)
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18 October 2014 Sir,
iam having a doubt relating to applicability of esic.pls clarify.
In our organisation X employee monthly ctc is 15000/- where Y ctc is 15100/-.Whether Esic applicable to both or only X as his CTC is less than or equal to 15000/-?

If ctc is applicable to employees ,on which amount contribution should be calculated.
I.e. on CTC/Gross.
Gross=CTC-employer pf contribution---is this correct for esic purpose

Pls clarify me AEAP.

Regards,
Pradeep Kumar

@VaibhavJ

@VaibhavJ (Expert)
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20 October 2014 Hi

it is calculated on Gross salary.

Gross: Basic + All allowances paid to employees on monthly basis.

Thanks

@VaibhavJ

@VaibhavJ (Expert)
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20 October 2014 Pl refer:

https://www.caclubindia.com/articles/esic-in-detail-16236.asp

Thanks

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Dhanashekhar K V

Dhanashekhar K V (Expert)
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21 October 2014 Hi Pradeep,

First you need to understand CTC & Monthly salary. Please refer below.

ESI will not be calculated on CTC. CTC means Gross Salary + Employer PF+ Employer Gratuity Group Insurance + other statutory benefits if any...

ESI applicability will apply only on fixed monthly gross salary. Examples below for your reference(assume figures are monthly).

Example 1
Basic : 6500
HRA: 3250
Conv:800
Spl Allow : 1000
Total Gross : 11550/-
ESI is applicable

Example 2
Basic : 10000
HRA:5000
Conv:800
Spl Allow : 2000
Total Gross is 17800/-
Let say you have joined mid month, hence you are getting salary for that monthly less than 15 thousand, In that case ESI will no be applicable. since you actual gross is more than 15 thousand.

Thumb rule: ESI is applicable upto 15000/- not as 14999/-

Hope the above is clarifies.