Introduction

The Employees’ State Insurance Corporation (ESIC) contribution rates were revised by the Government of India with effect from July 1, 2019.

As per the new mandate, the employee contribution was reduced from 1.75% to 0.75% and the employer contribution was revised from 4.75% to 3.25%.

These changes were aimed at improving compliance and enhancing employee welfare through reduced financial burdens.

To remain compliant, it is essential for organisations using uKnowva HRMS to upgrade the ESIC plugin accordingly.

This tutorial walks you through the process of configuring and updating the ESIC calculator plugin in your uKnowva instance based on the updated ESIC rules.

You can also refer to the official announcement here.

Step 1: Locate and Open the ESIC Plugin

To begin the upgrade process, log in to your uKnowva HRMS instance and navigate to the top-right corner of your profile picture.

From the drop-down menu, select the “uKnowva Configuration” option. This will take you to the configuration interface.

On the left-hand side panel, click on “Plugin Manager” to view all installed plugins in your system.

You can either scroll through the list or use the search bar to locate the “ESIC Calculator” plugin.

Once found, click on it to open its settings.

A configuration pop-up window will appear on your screen, allowing you to edit the parameters as per the July 2016 ESIC rule update.

Step 2: Configure Plugin Settings as per New ESIC Rules

Inside the configuration pop-up, start by locating the field labeled “Calculate ESIC on total of”.

In this field, enter the salary component name(s) on which ESIC should be calculated.

This ensures that the plugin considers only the relevant components while computing the contribution.

Next, find the field titled “Please enter the threshold amount – max amount on the basis of which ESIC will be calculated”.

Enter the maximum salary amount on which ESIC should be applicable. According to current rules, ESIC is not applicable if an employee’s gross salary exceeds ₹21,000 per month.

Enter this threshold or the applicable value defined by your organisational policy.

You will now configure the percentage contributions. Locate the field labeled “Please enter the ESIC % contributed by employee” and input 0.75 as per the July 2016 revision.

Similarly, in the field titled “Please enter the ESIC % contributed by the employer”, enter 3.25 to reflect the updated employer share.

Once all these fields are accurately configured, review the inputs to ensure that there are no errors or omissions.

Click the Save button at the bottom of the pop-up to apply the changes to your ESIC plugin settings.

Conclusion

That’s it!

You’ve now successfully updated the ESIC plugin in uKnowva HRMS as per the July 2016 Government guidelines.

By following this process, you ensure your payroll calculations remain compliant with statutory regulations, reflecting the correct contribution percentages for both employees and employers.

Keeping your system updated with rule changes not only prevents compliance issues but also enhances trust and transparency among employees.

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