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Contributions
Contribution is the amount payable to the Corporation by the Principal Employer in respect of an employee and comprises the amount payable by the employee and the employer.
It is obligatory on the part of the employer to calculate and remit ESI Contribution comprising of employers' share 4.75% plus employees' share of 1.75% which is payable on or before 21st of the following month, to the month to which the salary relates. If the employee is drawing upto Rs.50/- as daily average wage, he is exempt from the payment of his share of contribution. The employer is however to pay employer's share of 4.75% of the salary received/receivable by the employee.
Recovery of contribution
In the first instance the Principal Employer is to pay employers' share of contribution in respect of every employee whether employed directly or through immediate employer. The employees' share may thereafter, be recovered by making deduction from their wages for the wage period for which contribution is, however is payable. No such deduction may be made from any wages other than those relating to the period in respect in which contribution is payable.
Contribution in respect of arrears of wages :
As and when any increase in the wages/ remuneration is declared with retrospective effect, the liability towards payment of contribution accrues only in the month in which the decision is announced and no contribution is payable on the arrears pertaining to the period prior to the month of declaration/ announcement.
Computation & remittance
The entries pertaining to wages/ salary, number of days worked and share of contributions deducted in respect of each covered employees are to be entered in Form 7 register each month.
After making entries and totalling, the amount of contribution to be remitted is to be worked out. The amount of contribution in respect of a person is to be rounded to the next higher multiple of 5 paise and the total amount of contribution payable under one challan should be rounded to the whole rupee, if it is more than 50 paise.
Fill in blank ESI remittance challans in quadruplicate wherein all the columns in all the 4 challans are to be filled in. Employers code No. should be shown predominantly on all challans (A rubber stamp can also be affixed).
Present the Quadruplicate challans along with cash/cheque at the allotted branch of the State Bank of India. Bankers will return 2 copies of the challans to the employer of which one copy is to be preserved in the ESI file of the employer and the other copy of the challan is to be enclosed in the half yearly return of contribution (Form-6). In regard to the case of employers who have branches/units in more than one State, they are having the option to pay contributions either at their parent Region/Sub-Region where the main factory/ Establishment is situated or through their Branch Office(s)/Sales Office(s) etc. in the Regions where such offices etc. are located.
After the end of each contribution period, sum up the columns of the six months and prepare ""Return of Contribution' in quadruplicate enclosing the concerned copies of the six challans. Make entry in the facing front sheet of the RC having column for details of payment and this part is to be certified by the authorized signatory of the employer.
Return of Contribution (RC)
The RCs should be prepared in quadruplicate and submitted to the appropriate Branch Office within 42 days of the expiry of the contribution period (12th May or November 11th of each year).
Return of contribution is required to be submitted separately for the main Code Number and each sub-code number. It is in the interest of the employer to make compliance in respect of the sub-unit, branch office, sales office, registered office etc. independent of the compliance being made in respect of the main unit.
Where the employer prefers to make compliance from the parent unit, he may submit only one return in respect of all the branches. The single return in such cases will be accepted at the concerned Branch Office to which the parent unit is attached. Such employers are also advised to ensure that names of Branch Offices to which the Return pertains should be distinctly noted in the return so as to facilitate their expeditious onward transmission to those Branch Offices and also to avoid undue inconvenience to their Insured Persons.
Such employers also may submit return of contributions in respect of each branch office/sales office separately alongwith copies of remittance challans in support of payment of contributions in respect of the employees of each branch office to the parent Branch Office.
On the other hand, where the employer prefers to make compliance through their Branch Offices/ Sales Offices separately in the Regions where such offices etc. are located, the RC may be submitted by the Branch office to the concerned Branch Offices and there will be no difficulty in subsequent receipt of benefits.
Branch Office while acknowledging the RC for the half year will return one copy of RCs to the employer. Place this RC in ESI file of the employer & produce the same before the Inspecting Officer/ Insurance Inspector who comes for Inspection, which is a statutory one.
