By default, the Calculation type field is set to As Computed Value, and the Calculation period field is set to Months.
In the Compute field, select On Specified Formula from the Methods of computation list. The Compute sub-screen appears.
Select Basic Pay from the List of Pay Heads. Select Add Pay Head to add each pay head that is used for ESI calculation. Select End of List to return to Pay Head Creation.
In the Effective Date field, enter the desired date when the ESI Deduction begins.
By default, the Slab Type field is set to Percentage.
Enter the percentage value in the Value Basis field.
Similarly, enter the From Amount, Amount Upto, Slab Type and Value details for the next slab.
Note: Any income such as Basic Pay, Dearness Allowance, House Rent Allowance, Conveyance, and Overtime are considered for ESI calculation.
Add Basic Pay, HRA, Conveyance and Overtime before adding the ESI Deduction pay head in the Salary Details screen because the calculation for ESI is dependant on these pay heads.
Also, when multiple pay heads are added into the formula for calculation, ensure that the independent pay heads appear first, and the dependent pay heads, later.For example, HRA is dependant on Basic Pay and as a result, Basic Pay should appear first in the list, followed by HRA.