Limit for esi contibution not deductable

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Jeetendra yadav

Jeetendra yadav (Querist)
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23 February 2012 Is there is any limit for not deducting ESI contribution from employee and employer

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Guest (Expert)

23 February 2012 ESI is not deductible if gross wages are more than 15000/- p.m.

G.Ramesh

G.Ramesh (Expert)
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24 February 2012 ESI Scheme, like most of the Social Security Schemes the world over, is a self financing health insurance scheme. Contributions are raised from covered employees and their employers as a fixed percentage of wages. As of now, covered employees contribute 1.75% of the wages, whereas, the employers contribute 4.75% of the wages, payable to their employees. Employees earning upto Rs.100/- a day are exempted from payment of their share of contribution. The State Governments, as per provisions of the Act, contribute 1/8th of the expenditure of medical benefit within a per capita ceiling of Rs. 1200/- per Insured Person per annum. Any additional expenditure incurred by the State Governments, over and above the ceiling and not falling within the shareable pool, is borne by the State Governments concerned.Coverage under the ESI Act,1948
APPLICABILITY

Under Section 2(12) the Act is applicable to non-seasonal factories employing 10 or more persons.

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20* or more persons.

Further under section 1(5) of the Act, the Scheme has been extended to Private Medical and Educational institutions employing 20* or more persons in certain States/UTs.

*Note: 14 State Govts. / UTs have reduced the threshold limit for coverage of shops and other establishments from 20 to 10 or more persons. Remaining State Governments/UTs are in the process of reducing the same.

The existing wage limit for coverage under the Act is Rs. 15,000/- per month ( w.e.f. 01/05/2010).

AREAS COVERED
The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories

STATES
All the States except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.

UNION TERRITORIES
Delhi, Chandigarh and Pondicherry

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Jeetendra yadav

Jeetendra yadav (Querist)
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24 February 2012 thanks sir,
if a employee is earning more than rs 100 per day due to his absentism his salary for month was Rs2264 do emplyoer should deduct esi of 1.75%

G.Ramesh

G.Ramesh (Expert)
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26 February 2012 Employee earning more than Rs.100/- deduction of employee contribution compulsory as per ESI Act

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