Pf & Esi Deduction On Arrears Wages? - PDF Download

Dear Manish,

I know that ESIC does not deduct from arrears, but that amount cannot be booked in the balance sheet. Otherwise, in an ESIC inspection, you may face problems regarding the arrear amount.

Dear Prasad,

Well said! However, there must be some rule or judgment that specifically proves that arrears paid on the revision of wages are considered as "wages" or "other additional remuneration, if any."

It is clear in the act that any wage paid or payable with an interval not exceeding 2 months is considered a wage. I believe "or payable" is sufficient justification that arrears on wages should be categorized as "wages."

We cannot argue that arrears on wages are paid once a year due to a revision of minimum wages or an increment and therefore, the interval condition exempts us from paying the ESI amount. However, a question arises: if the government wants to revise the minimum wages from 5 months back, should we, as employers, be liable to pay ESI on those increased wages as the time period in question exceeds 2 months, and this is not the fault of the employer?

Seniors, please reply!

Regards,
Manish

Dear All,

Please find the attached document which clarifies all your queries.

Thank you.

Dear Amit,

Can you kindly upload the complete Employer's Guide? This would be very helpful to all.

Previously, we were required to deposit contributions on arrears whenever the current contribution period was concerned. This means that if there was a rise in any period, we were asked to deposit the contribution where returns were to be filed. This was because employees were benefiting from it for the same contribution period.

Regards

Dear Prasad,

I agree with you that arrears are just a part of the salary which was not paid to the employee on time; no other fundamentals are applicable to this.

Hi,

Please visit [ESI Contributions | Contributions for arrears of wages](http://www.esicmaharashtra.gov.in/htmldocs/esic_contribution_arrears.htm) to know the instructions of the ESI Corporation for the purpose.

As far as EPF contribution is concerned, you have to deduct the contribution on the arrears of wages subject to the condition of employer contribution on wages of Rs. 6,500 (including the wages of the month for which arrears are being paid). If the contribution was already paid on Rs. 6,500 earlier, no additional contribution is payable.

Best of luck.

Dear Mr. Manish,

I too agree with your view. As mentioned by you, "OR Payable" is enough for the justification that arrears on wages are "wages."

Here the logic is the benefit period against the contribution period. Employees will get benefits based on contributions paid during certain periods, i.e., April to Sept and Oct to March. After the completion of the benefit period, even if we release arrears, there is no use as the corresponding benefit period is over.

Regards,
Prasad SBR

Dear Sir,

I have been working with an NGO (Charitable Organization) for a few years. Our staff strength is 60. Our organization is not registered with ESIC so far. Is it mandatory for this organization to register with ESIC? If we apply for ESIC registration now, will we be asked to pay the contributions for the back period up to the time of formation of the NGO? Please clarify.

Vijay

Dear sir,

One employee's salary was $20,000 in January. He received an increment of $2,500, making the total $22,500. However, the increment salary was not paid in the January month. ESIC deduction of $150 was made on the $20,000.

This month, in March, we are paying arrears of $2,500 salary for January and February.

Now, I need to pay the January ESI contribution of $22,500. How much ESI do I need to pay this month, considering he is not eligible for ESI?

For January and February, how much do I need to pay on arrears of $2,500 + $2,500 salary?

Please suggest.

Thank you.

Malleshwar
9533377561

Hi,

My name is Raghu, and I work in HR at a manufacturing company. I have a question regarding ESI contributions. The current employee contribution is 0.75%, and the employer contribution is 3.25%. Previously, the employee contribution was 1.75%, and the employer contribution was 4.75%. I would like to know the contributions before these two instances. If anyone has this information, please kindly share it with me.

Thank you.