DEAR SIR Our company gives Leave encashment to the employees .... My question is that should we deduct E.S.I & P.F on leave encashment provided to employees ?
From India, Bangalore
1From India, Bangalore
Dear jadhavrahul,
You need not pay contributions on leave encashment under both the acts.
For ESI-
(22) “wages” means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes 35[any payment to an employee in respect of any period of authorised leave, lock out, strike which is not illegal or lay-off and] other additional remuneration, if any, [paid at intervals not exceeding two months], but does not include—
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any travelling allowance or the value of any travelling con�cession;
(c) any sum paid to the person employed to defray special ex�penses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge.
For EPF,
Refer the attached files
S.Sethupathy,
Excellent HR Services,
Erode.
From India, Selam
You need not pay contributions on leave encashment under both the acts.
For ESI-
(22) “wages” means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes 35[any payment to an employee in respect of any period of authorised leave, lock out, strike which is not illegal or lay-off and] other additional remuneration, if any, [paid at intervals not exceeding two months], but does not include—
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any travelling allowance or the value of any travelling con�cession;
(c) any sum paid to the person employed to defray special ex�penses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge.
For EPF,
Refer the attached files
S.Sethupathy,
Excellent HR Services,
Erode.
From India, Selam
Hi.
Sharing practical, not theoretical, experience. In general language, leave encashment is paid on an annual basis. Any amount that is not paid on a monthly basis doesn't come under any deductions. Also, this is not considered a salary/wage, so no deductions are to be made. However, you can make deductions (only ESIC, not PF) on incentives if they are paid on a monthly basis, as the payment gap is less than 3 months. PF deductions are made only on the basic salary and not on any other benefits provided to employees.
Any corrections to this are welcome.
From India, Calcutta
Sharing practical, not theoretical, experience. In general language, leave encashment is paid on an annual basis. Any amount that is not paid on a monthly basis doesn't come under any deductions. Also, this is not considered a salary/wage, so no deductions are to be made. However, you can make deductions (only ESIC, not PF) on incentives if they are paid on a monthly basis, as the payment gap is less than 3 months. PF deductions are made only on the basic salary and not on any other benefits provided to employees.
Any corrections to this are welcome.
From India, Calcutta
Dear Yashoda,
Here I am trying to provide some practical experience in the encashment of leave. Based on the Company Policy/Standing Orders, you can choose either Basic+DA or the total components. For both cases, you have to divide it by 30 to arrive at the encashment for one day. Then you can multiply it by the number of days to be encashed. Please note that this encashment will attract IT as the case may be.
Hope it is clear.
S. Sethupathy, Excellent HR Services, Erode.
From India, Selam
Here I am trying to provide some practical experience in the encashment of leave. Based on the Company Policy/Standing Orders, you can choose either Basic+DA or the total components. For both cases, you have to divide it by 30 to arrive at the encashment for one day. Then you can multiply it by the number of days to be encashed. Please note that this encashment will attract IT as the case may be.
Hope it is clear.
S. Sethupathy, Excellent HR Services, Erode.
From India, Selam
Hi Mr. Sethupathy thanks for the information. Some how our leave encashment formula is same as you mentioned .Soon I will get back to you on this topic.
From India, Calcutta
From India, Calcutta
Hi,
My company is a BPO company, and we have an annual limit of 15 PL per year. My query is if I resign from the company after 4 years without taking any PL during that time, what would be the PL balance? Would the PL payable to me be 15*4 = 60 days or only 15 PLs? According to my company policy, any unused PL at the end of the fiscal year will lapse. Is this correct? Can my company do that? It is a bit confusing why an employee should suffer due to this company policy. If this practice is permitted, could you please provide any documentation for this? My company operates under the Delhi Shop and Establishment Act.
Please revert as soon as possible.
Thanks,
Daniel
From India, Delhi
My company is a BPO company, and we have an annual limit of 15 PL per year. My query is if I resign from the company after 4 years without taking any PL during that time, what would be the PL balance? Would the PL payable to me be 15*4 = 60 days or only 15 PLs? According to my company policy, any unused PL at the end of the fiscal year will lapse. Is this correct? Can my company do that? It is a bit confusing why an employee should suffer due to this company policy. If this practice is permitted, could you please provide any documentation for this? My company operates under the Delhi Shop and Establishment Act.
Please revert as soon as possible.
Thanks,
Daniel
From India, Delhi
[QUOTE=jadhavrahul12;1534528]
DEAR SIR
Our company gives leave encashment to the employees. My question is, should we deduct E.S.I and P.F. on leave encashment provided to employees?
Dear HR Colleagues,
Please let me know how leave encashment is being calculated? Is it based on Gross Salary or Take-Home Salary?
Regards,
P K Sudarsan
Senior Executive HR
9841727934
pk_sudarsan@wabag.in[/email]
From India, Chennai
DEAR SIR
Our company gives leave encashment to the employees. My question is, should we deduct E.S.I and P.F. on leave encashment provided to employees?
Dear HR Colleagues,
Please let me know how leave encashment is being calculated? Is it based on Gross Salary or Take-Home Salary?
Regards,
P K Sudarsan
Senior Executive HR
9841727934
pk_sudarsan@wabag.in[/email]
From India, Chennai
Subject: Deduction of PF & ESI on leave with wages?
Dear Sir,
Our company provides Leave with wages at a rate of 6% to the employees. My question is, should we deduct E.S.I and P.F. on leave with wages provided to employees?
Sudhir
From United States, Southfield
Dear Sir,
Our company provides Leave with wages at a rate of 6% to the employees. My question is, should we deduct E.S.I and P.F. on leave with wages provided to employees?
Sudhir
From United States, Southfield
My Company/Factory is granting leaves from April to March (F.Y.). They pay leave encashment every year in April. Do you think they have to pay PF and ESIC on leave encashment as well? Is it correct as per the law to offer only 15 days of leave to total employees? Paid holidays are separate, and they will be declared every January. Please provide guidance.
Thakur
From India, Mumbai
Thakur
From India, Mumbai
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