Hi all, Can anybody tell me what is over time, is it part of the gross salary? And is ESI also deduct on overtime?
From India, Delhi
Acknowledge(0)
Amend(0)
4From India, Delhi
Acknowledge(0)Amend(0)
Dear,
If someone works more than 9 hours a day or 48 hours in a week, that extra work done by the individual is called overtime, and it is to be compensated with double rates of wages. You have to deduct ESI on it, and OT is not part of the gross salary.
Thanks,
J. S. Malik
From India, Delhi
Acknowledge(0)Amend(0)
If someone works more than 9 hours a day or 48 hours in a week, that extra work done by the individual is called overtime, and it is to be compensated with double rates of wages. You have to deduct ESI on it, and OT is not part of the gross salary.
Thanks,
J. S. Malik
From India, Delhi
Acknowledge(0)Amend(0)
Dear,
OT means working more than the designated duty hours. We shall pay for the overtime at double rates for those extra hours. We have to deduct ESI on OT; however, OT is not considered part of the gross salary. Instead, it will be counted as a contribution and the ESI daily rate will be calculated accordingly.
Regards,
Kalijanni
From India, Guntur
Acknowledge(0)Amend(0)
OT means working more than the designated duty hours. We shall pay for the overtime at double rates for those extra hours. We have to deduct ESI on OT; however, OT is not considered part of the gross salary. Instead, it will be counted as a contribution and the ESI daily rate will be calculated accordingly.
Regards,
Kalijanni
From India, Guntur
Acknowledge(0)Amend(0)
Thank you for your answer. I know the meaning of overtime, and we are paying double for that. However, I want to know how we can deduct ESI on OT for a worker whose salary is $3073, and his OT is 40 hours. What would be his ESI deduction on $3073 at 1.75% and for OT at 40*2*?????
From India, Delhi
Acknowledge(0)Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
ESI will be deducted from the total salary, including the OT amount. There may be months during which the salary of an employee may exceed Rs 10,000 (the limit for ESI). Still, in that month, the contribution payable by the employee at 1.75% of the increased amount shall be deducted. Similarly, the employer has to contribute at 4.75% of the total wages, including the OT amount.
However, for deciding the eligibility of an employee under the ESI, the OT will not be counted. Therefore, one whose salary, including OT, becomes more than Rs 10,000, is not exempted from ESI.
In your case, the salary is Rs 3,073. OT amount is calculated as 2 times the hourly rate, i.e., 3,073/30/8 x 40 = Rs 1,024. Total salary = Rs 3,073 + Rs 1,024 = Rs 4,097.
ESI - Employee's share = Rs 71.70
ESI - Employer's share = Rs 194.60
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
However, for deciding the eligibility of an employee under the ESI, the OT will not be counted. Therefore, one whose salary, including OT, becomes more than Rs 10,000, is not exempted from ESI.
In your case, the salary is Rs 3,073. OT amount is calculated as 2 times the hourly rate, i.e., 3,073/30/8 x 40 = Rs 1,024. Total salary = Rs 3,073 + Rs 1,024 = Rs 4,097.
ESI - Employee's share = Rs 71.70
ESI - Employer's share = Rs 194.60
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Dear Mr Madhu, Thank you for sharing such an elaborate working of ESI and OT. I knew the concept but now you have added to it with the practical implementation. Thanks again. Regards Dhanashree
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
I am totally confused. If the salary of an employee is, say, 6000 per month, and he has done overtime of 2 hours per day (every day) during the month, how will the calculations be done?
Dear Madhu, can you please explain: In your case, the salary is Rs. 3073. The overtime amount is 2 times the hourly rate, i.e., 3073 / 30 / 8 x 40 = 1024. What do 8 and 40 represent?
Total salary = 3073 + 1024 = Rs. 4097. ESI - Employee's share = 71.70. ESI Employer's share = 194.6. What do 1.75 and 4.75% represent?
From India
Acknowledge(0)Amend(0)
Dear Madhu, can you please explain: In your case, the salary is Rs. 3073. The overtime amount is 2 times the hourly rate, i.e., 3073 / 30 / 8 x 40 = 1024. What do 8 and 40 represent?
Total salary = 3073 + 1024 = Rs. 4097. ESI - Employee's share = 71.70. ESI Employer's share = 194.6. What do 1.75 and 4.75% represent?
From India
Acknowledge(0)Amend(0)
I guess you should read the complete communication. It says that total overtime is of 40 hours. Now if your monthly salary is Rs 3073, then to calculate the per hour rate of salary, you will have to compute 3073/30 = 1 day's salary. Let's say this figure is Rs X. Then X/8 (assuming that it is an 8-hour day, as is normally the case) will give you the salary paid per hour. Let's say this amount is Rs Y. So Y * 40 * 2 = the total amount to be paid for overtime.
According to the ESI Act, any person who is drawing wages below Rs 10,000 per month (this revised limit was made effective around 2 years ago) is covered under the ESI Scheme. In this scheme, the employee contributes 1.75% of his salary towards the ESI Fund, and the employer contributes 4.75% of the salary. Refer to Section 2 (clause 9), Chapter IV - section 39 of the Employee State Insurance Act, 1948.
I hope your doubts are clarified now.
Regards,
Dhanashree
From India, Mumbai
Acknowledge(0)Amend(0)
According to the ESI Act, any person who is drawing wages below Rs 10,000 per month (this revised limit was made effective around 2 years ago) is covered under the ESI Scheme. In this scheme, the employee contributes 1.75% of his salary towards the ESI Fund, and the employer contributes 4.75% of the salary. Refer to Section 2 (clause 9), Chapter IV - section 39 of the Employee State Insurance Act, 1948.
I hope your doubts are clarified now.
Regards,
Dhanashree
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All,
Can anyone tell me what are all the various components of salary for which ESI has to be paid? Also, let me know the various allowances like Conveyance, O.T, Incentives, and so on for which ESI has to be paid or not.
My second question is, X's salary is 15000; therefore, he is not covered under ESI. A sum of 5000 is paid to him as an incentive. Do we have to pay ESI for X? If so, on what amount ESI has to be paid?
Regards,
Dinesh R.
9941491766
From India, Madras
Acknowledge(0)Amend(0)
Can anyone tell me what are all the various components of salary for which ESI has to be paid? Also, let me know the various allowances like Conveyance, O.T, Incentives, and so on for which ESI has to be paid or not.
My second question is, X's salary is 15000; therefore, he is not covered under ESI. A sum of 5000 is paid to him as an incentive. Do we have to pay ESI for X? If so, on what amount ESI has to be paid?
Regards,
Dinesh R.
9941491766
From India, Madras
Acknowledge(0)Amend(0)
Dear Dinesh,
If the incentive is given for more than a quarterly period, then this is not part of the gross salary (i.e., not a part of ESI wages). If it is paid for a period less than a quarter, i.e., monthly/bimonthly, then this amount should be considered as ESI wages.
In case of any queries, please feel free to call Prashant at 9850401160 (Pune, Maharashtra).
Regards,
Prashant
From India, Pune
Acknowledge(0)Amend(0)
If the incentive is given for more than a quarterly period, then this is not part of the gross salary (i.e., not a part of ESI wages). If it is paid for a period less than a quarter, i.e., monthly/bimonthly, then this amount should be considered as ESI wages.
In case of any queries, please feel free to call Prashant at 9850401160 (Pune, Maharashtra).
Regards,
Prashant
From India, Pune
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.