One of our employees currently earns 20,000 per month, and we have been deducting ESI contributions from their salary. Their salary has now increased to 25,000 from November. Do we still need to continue with ESI deductions, or can we stop? If we decide to stop the ESI contribution, what would be the procedure?
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Continue till March 2025 and only then can you stop.
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ESIC deductions can only be stopped in October or April. Therefore, please continue deducting ESIC until March 2025, and stop the deduction from April 1, 2025.
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Yes, as the Changeover month for ESI is only April and Mar in a year, for this employee ESI has to be deducted till Mar-2025.
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Hi Lakshanikantha,
It should directly deducted by the system if it is so. We can’t do manual Calculation. System is not deucting ESIC once the salary of the candidate is increase in mid of the year.
Regards
Beena
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For ESI deductions, it is half year closure. Means April to September and October to March. Even the salary increases in between exceeds the ESI Limit, the ESI required to be deducted on the maximum limit amount and remit to the Govt account. The employee also can the avail the benefits. Normally all the payroll software supports this method
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Hi
The Half Yearly contributions are mandatory as far as ESI is considered - the presumption is the employee can continue to avail the benefits inspite of crossing the wage bracket. In case your payroll does not support this activity, please do it manually.
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