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author's profile photo Former Member
Former Member

ESIC being deducted even after crossing the 15K Limit

Dear Experts,

I have an issue where an employee's salary has crossed the Rs.15,000 level & even then the ESIC is getting deducted which should have not been the case.

Below are the details:

Basic 5,930.00 Special Allowance 6,555.00 Education Allow 200.00 Transport Allowance 800.00 HRA 1,483.00

Uniform Allowance 750

Total : 15718.

In the RT Table it shows the

/112 ESI Basis As 15194.06

/113 ESI Basis Nominal as 14718.

Can you please advise what could be the cause that the ESI is still getting even after the salary has exceed the applicable limit & is there any setting which has to be done.

Thanks,

Abdul Ayubi

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2 Answers

  • author's profile photo Former Member
    Former Member
    Posted on Nov 21, 2012 at 06:27 AM

    Hi Abdul

    There are certain rules for ESIC deduction. The deduction happening in your case seems to be normal and that's how it happens.

    The system checks for six months ESIC contribution period from (April to Sept) and (Oct to March)

    So even if the salary is changed during this period system will continue to deduct.

    for eg.

    if salary is changed in June and it crosses 15000 K still system will deduct ESIC contribution till Sept month. Same if salary is changed in Nov month system will still deduct the ESIC till March.

    Check the ESIC deduction rules.

    Thanks

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    • Former Member Former Member

      Hi Abdul,

      If the salary is changed in April. ESIC contribution will be deducted till contribution period.

      below is deduction rule for ESIC.. (source internet)

      ESI contribution stops when the employee's gross income crosses Rs. 15000/-.

      • This stoppage of ESI cannot happen in any month. The changeover from ESI-deduction to no-ESI-deduction can happen only in 3rd (March) or 9th (September) month only. i.e. even if an employee's salary crosses, 15000 in July, he will continue to have ESI deduction until August.
      • In the september payroll, the employee's ESI deduction will be zero (as he has crossed Rs. 15000/-)
      • The comparision of income is done with Full Income and the calculation of ESI is done on the actual payout (income).
  • author's profile photo Former Member
    Former Member
    Posted on Nov 21, 2012 at 06:54 AM

    Please check below table entries :

    ESI:

    VV_511P_B_ESILT_AL0 - Maintain ESI Basis Limit

    VV_511P_B_ESIMN_470- -Maintain Average Wage Per Day Limit

    VV_511K_B_DYSMN_470-Maintain Number of Working Days in a Month

    V_T7INE1, - Define Personnel Area and Subarea Groupings for ESI

    V_7IN0P_ESI -Assign ESI Groupings for Personnel Area and Subarea

    V_T7INE3-Maintain Contribution Rates for ESI

    check infotype 0588 ( Sub type for ESI ) then you can see in the payslip.

    Also please check this link :

    http://scn.sap.com/thread/2072505

    Sushilkumar.M

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