At what percentage ESIC should be collected from the employee and how much employer has to contribute?
Is it to be calculated only on Basic salary?
C.rajesh
(Articles)
(1392 Points)
Replied 09 April 2008
ESI:
Following are to be taken into account to calculate ESI Contribution,
1. Basic
2. Dearness Allowance
3. City Compensatory Allowance
4. House Rent Allowance
5. Over Time Wages
6. payment for day of rest
7. production incentive
8. bonus other than statutory Bonus
9. Night shift allowance
10. Heat, Gas, Dust allowance
11. payment for unsubstituted allowance
1. Meal or food allowance
2. Suspension allowance
3. Lay off compensation
4. Children education allowance
Employer has to contribute at the rate of 4.75% on the above said amounts if the salary after including all the above amounts, except Over Time Wages, is Rs.10, 000/- or less after crossing the Rs.10, 000/- it is optional to the company to contribute the employer contribution.
Company has to deduct the ESI @ 1.75% from the employees’ salary on the above said amounts.
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