ESI contribution stops when the employee's gross income crosses Rs. 15000/- (up to May 2010 this was 10000)
- This stoppage of ESI cannot happen in any month. The change over from ESI deduction to No ESI deduction can happen only in 3rd (March) or 9th (September) month i.e. even if an employee's salary crosses, 10000 in July, the ESI deduction will continue until August.
- In the September payroll, the employee's ESI deduction will be zero (as has crossed Rs. 10000/-).
- The comparison of income is done with Full Income and the calculation of ESI is done on the actual payout (income).