If an employee chooses to continue with ESI even after his/her salary was hiked above 21,000/- limit, what will be the employer contribution? Is it zero, 4.75% of 21,000 or 4.75% of the new salary?
From India, Kottayam
1From India, Kottayam
There is no provision in ESI Act permitting an employee to exercise option to continue to be covered by the ESI if his wages exceed Rs.21000/-pm.However where such hike beyond Rs 21000/- occurs after the start of the contribution period, he can continue to be covered till the end of the contribution period.
B.Saikumar
HR & Labour Relations Consultant.
From India, Mumbai
B.Saikumar
HR & Labour Relations Consultant.
From India, Mumbai
In case the hike happens in between a contribution period, do we have to deduct 1.75% / 4.75% of 21,000/- or the new gross salary?
From India, Kottayam
From India, Kottayam
Yes, you have to deduct employee and employer contributions at the existing rates till the revised rates come into force. B.Saikumar HR & Labour Relations Consultant
From India, Mumbai
From India, Mumbai
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ESI contribution rates lowering.pdf