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Pf, esi applicability and limits

ajimuddin (accountant) (30 Points)

24 October 2013

Please provide me applicability and rates of PF & ESI

Employees are more than 20 members and all salaries are more than 15000 p/m

Is it mandatory to register OR deposit any amount under PF & ESI acts ?

If applicable please provide the rates, percentages etc......

My company is established in Andhra Pradesh

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15 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 24 October 2013

Brief Information on ESI:

ESI Laws are applicable on employees receiving a salary less than or equal to Rs. 15,000 in establishments which employ more than 10 persons.

For the purpose of getting ourselves registered with the ESI Department, we will need to get a form filled up from all employees covered under this scheme.

To know more regarding ESI benefits you are requested to visit the link given below:

https://www.esic.nic.in/other_scale_mb.php

LIABILITY TOWARDS ESI

As per law, the liability towards ESI is 6.50% of the total salary paid to an employee. The contribution payable to the government is shared as under:-

1. Employee contribution: 1.75%

2. Employer contribution: 4.75%

Total:- 6.50.%

In other words, the maximum liability of ESI per employees is Rs. 975, out of which Rs. 263 shall be recovered from the employee.

Thanks

Attached File : 132189 1242436 standard note on esic.pdf downloaded: 7467 times

6 Like

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Pijush Roy (ERP SAP Functional Tester) (281 Points)
Replied 24 October 2013

Good response @ Ankur Thnx

ajimuddin (accountant) (30 Points)
Replied 24 October 2013

So it is mandatory to register both PF & ESI,

and need to deduct or deposit for applicable employees only.

Thank u very much for your valuable information.....

1 Like

CA VIRAL SANGHVI (Finance head) (681 Points)
Replied 25 October 2013

As per ESIC Act Esic should be deducted when the gross salary is less than equal to 15000/- p.m. here your all employee's salary are more than 15000/- so no need to deduct Esic

PF is applicable when the basic salary of employee is less than 6500/- pm. if your all employee's salary are higher than basic 6500/- than no need to deduct pf also

However as your employee strength is more than 20 so please take labour license for your establishment for employing the employee

And I think as PF and ESIC are not applicable there is no need to register for the same

1 Like

Jyothis (Article) (1127 Points)
Replied 03 January 2016

What is the meaning of basic salary to check PF Applicability is it Gross pay,Basic+DA or Basic alone

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rajesh sharma (account manager) (21 Points)
Replied 12 April 2016

Dear Ankur,

My salary is 40K per month, I want to contribute for ESI. Is it possible? My employer says I cant contribute. :(

Jyothis (Article) (1127 Points)
Replied 12 April 2016

@ Ankur Garg,

I think maximum liability of ESI can't be restricted.

Rs.15k is considered only for Coverage,Once 15k is exceeded Contribution needs to paid on excess salary till end of Relavant contribution period.

Since department has charged liability for non deduction of ESI from Gross salary in excess of Rs.15k

Once 15k is crossed Employee can be removed from ESI Coverage.

I have doubt is there any issue in not removing employee from ESI coverage once his Gross salary exceeds Rs.15k

Vishal Kumar (Student) (37 Points)
Replied 05 May 2016

If employees salary is exceeds 15000 on 1.04.2016 then what we have to do?

Is it necessary to deduct ESI?

1 Like

Vishal Kumar (Student) (37 Points)
Replied 05 May 2016

If employees salary is exceeds 15000 on 1.04.2016 then what we have to do?

Is it necessary to deduct ESI?

Jyothis (Article) (1127 Points)
Replied 05 May 2016

Contribution till the end of relevant contribution period is mandatory.i.e Apr-Sep & Oct-Mar.

On such higher Gross pay.Say is gross pay is Rs.20,000 need to compute ESI on 20k.

After end of contribution period,you can terminate such employees from ESI Coverage.

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Manoj Jindal (CA) (117 Points)
Replied 11 July 2016

pls

any one suggest to me that esi & pf are applicable on any apartment or socity.

in which employees are more than 10.

Vikash Shah (Real Estate Developer) (47 Points)
Replied 14 November 2016

Please any suggestion

I had around 25 employees and have both EPF & esic registered for past two years. Now due to automisation in machinery the number of employees has been reduced to 16 permanently. Do i still need to comply with EPF regulation for remaining 16 employees.?