Indian Payroll - ESI Deduction not coming correctly

[Former Member]

While running Indian payroll for few emloyee ESI deduction is not happening as per expectation.

For example

Case 1 : Salary is less than 10,000 but it does NOT deducts ESI

For 1 employee Total Basis and other Wage Tye total comes to Rs. 8839.85

In /112 it comes as Rs. 8839.85 but for /113 it comes as Rs. 10360.64

Employee is having 6 days loss of pay

Case 2 : Salary is more than 10,000 but it deducts ESI

For 1 employee Total Basis and other Wage Tye total comes to Rs. 11278.00

In /112 it comes as Rs. 11278.00 but for /113 it comes as Rs. 8915.00

Request you help to fix the problem

Payroll period is 21 of march to 20 of april

[Vivek_V · Accepted solution]

Hi,

ESI is deducted on the basis of amount of /112, however the eligibility is checked based on amount of WT /113. In other words if the amount of /113 is more than 10000 then ESI will not be deducted even if /112 is less than 10000 and vice versa.

From the problem explained, it is clear that the amount of /112 and /113 is not coming correctly. To correct these, check processing class 72 of your WTs, it is used to get the amount of WT /113. Also check cumulation class 12, it is used to get amount of WT /112.

Hope this helps.

VK

[Former Member · Accepted solution]

Hi VK,

It seems your point may be valid.

Any document avaialbe to understand Processing Class, Cumullation class, Evaluation class

As mentioned in your mail Procssing class 72 there are six option 1,2,3,4,5,6 available

Any document which can guide us what to select for each wage type and why

Request you to let us know where we can find such document to guide us

[Former Member]

Information provided by VK has helped to look into specific arear. With some R&D we could able to understand the possible cause of problem. Still we are looking for a document to give details of each option and its usage.

[Former Member]

Hi

Checks for the Contribution Period

There are two ESI contribution periods:

a) April 1 - September 30

b) October 1 - March 31

The function calculates the Nominal Pay for ESI eligibility check,

- If the payroll run is for the first month of the contribution

period, that is, April or October, or

- No ESI contributions have been made in any of the previous

periods of the current contribution period.

If the employee has contributed for ESI in any one month of the ESI

contribution period, then the employee will continue to contribute

for all the subsequent months in that contribution period.

I hope this will help u .. check the same in the function INESI.