Yes you are correct Washing allowance is not attracted for payment of contributions under Sec 2(22) of the ESI Act, 1948 with regards sanagapalli Asst.Director (Retd) ESI Corporation
From India, Hyderabad
14From India, Hyderabad
Dear Madhu,
I need your help in understanding as how ESI is calculated. Let me take up the below C2C details as an example.
Components Salary (Rs.)
Basic / Consolidated 2,000.00
*FBP 7,000.00
**Variable 3,000.00
Gross Salary 12,000.00
***Performance Allowance
(10 % of Gross Salary) 1,200.00
Total Salary 13,200.00
**** Statutory Bonus 1,200.00
Total C2C 14,400.00
* FBP – Flexible Business Plan allows planning and defining various components. This is basically for Income Tax provision.
** Variable is paid if 20 % of 1 Lakh Sales target is met
*** Performance Allowance is paid if 1 Lakh Sales target is met
**** Assuming Bonus is declared as 10 % on gross.
Now clarify the following.
1) Should I take Gross Salary or Total Salary or C2C to calculate ESI? I know that in any case ESI is applicable in this case.
2) Also the above salary can have additional earning in the form of Incentives which can make Gross or Total or C2C cross 15 K. In this scenario will be ESI applicable?
3) As per the point 1 & 2, salary can keep varying every month either below 15 K or more than 15 K. In such scenarios, should we keep including or excluding ESI every month as the case may be.
4) Also above salaries can have deductions towards PF, PT, ESI itself and as well as any advance taken. In such scenarios how to compute ESI?
5) Also assuming that all the three components of the above example crosses 15 K and due to absenteeism, it might fall under 15 K. In such scenario, how ESI is calculated?
6) What are the components that I can exclude/Include from/in ESI calculation and how do I do it.
It will be great help if you can let me know the fundamentals of ESI calculation. I am in trouble and I need to calculate ESI for more than 100 people now.
Thanks for your kind help in advance.
rgds,
Arvind
From India, Bangalore
I need your help in understanding as how ESI is calculated. Let me take up the below C2C details as an example.
Components Salary (Rs.)
Basic / Consolidated 2,000.00
*FBP 7,000.00
**Variable 3,000.00
Gross Salary 12,000.00
***Performance Allowance
(10 % of Gross Salary) 1,200.00
Total Salary 13,200.00
**** Statutory Bonus 1,200.00
Total C2C 14,400.00
* FBP – Flexible Business Plan allows planning and defining various components. This is basically for Income Tax provision.
** Variable is paid if 20 % of 1 Lakh Sales target is met
*** Performance Allowance is paid if 1 Lakh Sales target is met
**** Assuming Bonus is declared as 10 % on gross.
Now clarify the following.
1) Should I take Gross Salary or Total Salary or C2C to calculate ESI? I know that in any case ESI is applicable in this case.
2) Also the above salary can have additional earning in the form of Incentives which can make Gross or Total or C2C cross 15 K. In this scenario will be ESI applicable?
3) As per the point 1 & 2, salary can keep varying every month either below 15 K or more than 15 K. In such scenarios, should we keep including or excluding ESI every month as the case may be.
4) Also above salaries can have deductions towards PF, PT, ESI itself and as well as any advance taken. In such scenarios how to compute ESI?
5) Also assuming that all the three components of the above example crosses 15 K and due to absenteeism, it might fall under 15 K. In such scenario, how ESI is calculated?
6) What are the components that I can exclude/Include from/in ESI calculation and how do I do it.
It will be great help if you can let me know the fundamentals of ESI calculation. I am in trouble and I need to calculate ESI for more than 100 people now.
Thanks for your kind help in advance.
rgds,
Arvind
From India, Bangalore
Dear Arvind,
u have displayed the salary structure and noted that this is I.T. Purpose, this is ......purpose, so, this is immaterial, u just go through what exactly ESI Act required to attract the contribution on the salary and wages.
1. It is very clear that those who are getting salary more than 15000/-p.m.are exempted.
2. those who are working in the non implemented areas are also exempted.
3. In Maharashtra those who are living in the non implemented areas are also exempted,
4.Now, let us check the components of salary/wages which attracts for the contribution under ESI,
a. Basic
b. D.A.
c. Special Allowances,
d. HRA
e. conveyance allowance,
f. any allowance like shift, cash,supervisory,typist, plant, .
computor,machine,canvassing,first aid or as u say, FBP,
PERFORMANCE, VARIABLE, ALL THESE ALLOWANCES WILL ATTRACT.
5. Statutory bonus as per Payment of Bonus Act, will not treated as salary or wages,
6. Washing allowance, Fuel expenditure allowance, leave encashment and annual commission will not be treated as salary wages,
Hope it will satisfy ur query,
Regards,
KIRAN KALE
From India, Kolhapur
u have displayed the salary structure and noted that this is I.T. Purpose, this is ......purpose, so, this is immaterial, u just go through what exactly ESI Act required to attract the contribution on the salary and wages.
1. It is very clear that those who are getting salary more than 15000/-p.m.are exempted.
2. those who are working in the non implemented areas are also exempted.
3. In Maharashtra those who are living in the non implemented areas are also exempted,
4.Now, let us check the components of salary/wages which attracts for the contribution under ESI,
a. Basic
b. D.A.
c. Special Allowances,
d. HRA
e. conveyance allowance,
f. any allowance like shift, cash,supervisory,typist, plant, .
computor,machine,canvassing,first aid or as u say, FBP,
PERFORMANCE, VARIABLE, ALL THESE ALLOWANCES WILL ATTRACT.
5. Statutory bonus as per Payment of Bonus Act, will not treated as salary or wages,
6. Washing allowance, Fuel expenditure allowance, leave encashment and annual commission will not be treated as salary wages,
Hope it will satisfy ur query,
Regards,
KIRAN KALE
From India, Kolhapur
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Rules for Statutory Deductions Exemptions Perquisites-Pay roll.doc