hcm_esi retrospective accounting
DESCRIPTION
HCM_ESI Retrospective AccountingTRANSCRIPT
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Agenda
Introduction
Configurations
Computation Flow
Loss of Pay Scenario
Mid-month Joinee and Termination
ESI Retrospective Behaviour
Change in Salary of the Employee
Creation/Change in Other Statutory Deductions
Deletion of Other Statutory Deductions
Reporting
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Introduction
Employee State Insurance (ESI) is a component of compensation provided to an
employee earning wages below Rs.15,000 to provide for:
• Hospital facilities and out-patient facilities
• Medicines provided by the hospital
• Compensation in case of accident / death
A percentage of amount specified by a Central Act is deducted from the employees salary
and sent to the ESI Corporation along with Employer's contribution.
Current contribution rate for :
• Employee is 1.75% of Basic + Dearness Allowance + All other allowances + Overtime
• Employer is 4.75% of Basic + Dearness Allowance + All other allowances + Overtime
* Basis = Basic + Dearness Allowance + All other allowances
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Contribution Period Benefit Period
April 1 - September 30 January 1 - June 30
October 1 - March 31 July 1 - December 31
ESI Contribution Period
• If employee is eligible for ESI in any one month of ESI contribution period, then
the employee continues to contribute for all subsequent months in that
contribution period
• ESI Number is required to be maintained (allotted by ESI) for all the employees
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Configurations
IT0588 • Maintain Subtype 0001 of IT0588 (Other Statutory Deductions)
ESILT
• ESI contribution applicable when basis less than or equal to limit maintained in ESILT in view V_T511P
ESIMN
• Only Employer contribution when basis is less than or equal to ESIMN in V_T511P
ESIPH
• ESI limit for Physically Challenged employees is maintained in ESIPH in view V_T511P
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Actual Basis Vs. Nominal Basis
Actual Basis
Basis
Eg: INR 20,000
Loss of Pay
Eg: 3 LOP
Actual Basis
Eg:INR
18,000
Nominal Basis
Basis
Eg: INR 20,000
Loss of Pay
Eg: 3 LOP
Nominal Basis
Eg: INR 20,000
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Computation flow with Loss of Pay
Employee is eligible for ESI contribution
Employee has certain days of Loss of Pay
Nominal basis is compared with ESI limit(INR:15,000)
Employee will contribute towards ESI
ESI Basis:
INR 12,000
Say, 15 days
of LOP
Actual Basis:
INR 6,000
Nominal Basis:
INR 12,000
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Computation flow for mid - month Joinee/Termination
Employee joined in mid of month
Salary exceeds the ESI limit (ESILT)
IT588(0001) maintained
Nominal Pay is compared with ESI limit
No ESI Contribution for the employee
Joined on
15th of
April
Say, INR
20,000 is the
Monthly salary
Maintained
from 15th April
Nominal Pay:
INR 20,000
However, Wagetypes will have
below values:
/112 (Actual Basis) = INR 10,000
/113 (Nominal Basis) = INR 10,000
Retrospective ESI
Change in Salary of the Employee
Creation/ Change in Other Statutory Deductions
Deletion of Other Statutory Deductions
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Retrospective change in salary of the employee
Salary is changed retrospectively
Difference b/w Actual ESI Basis (/3EA) from retrospective runs and previous payroll runs is taken into C/F wagetype (/AEA)
Amount from /AEA is cumulated into B/F wagetype (/ZEA) & brought into current period processing
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Retrospective increase in salary of the employee
Employee is contributing
towards ESI for April to
September block
• Basis = /3EA
Salary is increased
retrospectively from April
• Salary increment can be done from period within the same block / across blocks
Delta of Basis is brought forward
to the Current period
processing
• Delta Basis = /ZEA
ESI contribution would be done on
current month basis + B/F delta
basis
Basis = /3EA (New) +
/ZEA
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Retrospective decrease in salary of the employee
Employee is contributing
towards ESI for April to
September block
• Basis = /3EA
Salary is decreased
retrospectively from April
• Salary decrement can be done from period within the same block / across blocks
Delta of Basis is not brought
forward to the Current period
processing
• Delta Basis = /ZEA
ESI contribution would be done only on current
month basis
Basis = /3EA (New)
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Retrospective creation/change in Other Statutory
Deductions
Change is done
across blocks
Change is done in any
period within the same
block
Retrospective creation / change of
IT0588 (0001)
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Creation/Change within same Block
Employee has salary less than ESI limit
Payroll is executed for some periods
IT588(0001) maintained retrospectively
Basis of retro period is b/f to current period processing
ESI contribution would be done on current month + B/F basis
IT0588 is
not
maintained
Say, April &
May period
payroll is run
Maintained in
June eff. April
/AEA is formed
in April & May,
cumulated to
/ZEA in June
ESI basis = /3EA
(Current month
basis) + /ZEA
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Creation/Change across blocks
Employee has salary less than ESI limit
Payroll is executed for some periods
IT588(0001) maintained retrospectively
Basis of retro period is b/f to current period processing
ESI contribution would be done on current month + B/F basis
IT0588 is
not
maintained
Say, Till
October period
payroll is run
Maintained in
November eff.
April
/AEA is formed for all
retro periods i.e. for
April to October and
cumulated to /ZEA in
November
ESI basis = /3EA
(Current month
basis) + /ZEA
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Retrospective Deletion of Other Statutory Deductions
Deletion done
across blocks
Infotype deleted in any period within the
same block
Retrospective deletion of
IT0588 (0001)
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Deletion within same Block
IT588(0001) is maintained
• Employee is eligible for ESI contribution
Employee is contributing
towards ESI for April and May
• Basis = /3EA
IT0588(0001) is deleted
retrospectively
• Deletion is done in June (period within the same block) eff. April
System refunds ESI contribution
Contribution done for
April & May is
refunded
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Deletion across the Block
IT588(0001) is maintained
• Employee is eligible for ESI contribution
Employee is contributing towards ESI
• Contribution is done in April – September block & also for October & November period
IT0588(0001) is deleted
retrospectively
• Deletion is done in December (period across block) eff. April
System refunds ESI contribution
Contribution done for
October and November is
refunded
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BAdI to stop Refund
Implemented
Not Implemented
HR_IN_ESI_REFUND
Refund
No
Refund
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Reporting
HINCESI0
DEFINITION
Generates Form 5, Form 6 & ESI Monthly Report
Contribution Period & Output Format on selection screen
determines the output of the report
FEATURES
Form 5: ESI contr. details of employees for
a contr. period printed as Form
Form 6: ESI contr. Details for a contr.
Period are can be downloaded as
worksheet
ESI Monthly Report : Announced in the
year 2011 to file employee's monthly
details