Employee State insurance Rate Change


Background 

  • With effect from 1st July 2019, the ESI rates have been reduced to 4% from the earlier 6.5%. (Employer contribution from 4.75% to 3.25% & Employee contribution from 1.75% to 0.75%)
  • To give effect to this change and the corresponding impact on the CTC / Salary breakup, please click on 'Update Salary breakup' in the next screen for the employees who are in the ESI bracket.
  • The system will automatically update the breakup based on how you had originally configured ESI employer contribution-whether a part of CTC or not.

Pre-Requisites

Payroll should be processed for ESI in the month of June 2019.


Implementation

  • On clicking “Run Payroll”, a screen will appear (for the first time) as under. Only ESI covered Employees will be listed there.

Note: If any Employee has full month LoP, then increment screen to be used update the new ESI Rates)

  • User has to click on “Update Salary breakup” in the screen to give effect to ESI rate change and the corresponding impact on the CTC / Salary Break Up. 
  • The system will automatically update the breakup based on how you had originally configured ESI employer contribution, whether as part of CTC or not.



Remarks

  • This break up has been built on the lines of Increment module specification.
  • All the updated ESI Employees will be available at



  • If user wants to unlock the payroll month, user must flush the increment as mentioned above.
  • If any Employee has increment, flush the increment for that Employee and use the increment screen. ESI rate change will be handled in increment.
  • If increment was done before run Payroll, such Employees will not appear in the update Salary breakup screen.
  • The Update Salary break up screen will not appear if Special Allowance is not mapped. Such Companies shall handle the same through increment screen.
  • In case of re-run of Payroll Process and user wants to rerun the breakup for ESI Employees, use the following url (Paydata for Jul-19 must be deleted)

  • All states have been updated with the new ESI Rates
  • Any new Employees created with July Payroll month will have new rates calculated at the Employee Master itself.
  • For any clarification please contact the Support team – 8047107070 – IVR 2.