Dear Senior, good morning.
My question is this,
If the salary of an employee is 18000 Gross every month. And he gets 12000 overtime every month, that means 30000 salary comes in the bank every month. So, E S I C will be deducted on how much salary?
Regards
Monu Dhiman
From India, Yamunanagar
1My question is this,
If the salary of an employee is 18000 Gross every month. And he gets 12000 overtime every month, that means 30000 salary comes in the bank every month. So, E S I C will be deducted on how much salary?
Regards
Monu Dhiman
From India, Yamunanagar
Hi Monu Dhiman, You must deduct ESIC at Rs.30,000/- because the employee Fixed wage is under 21k. and you include the OT wages also. Also please aware about the OT wages act.
From India, Karur
From India, Karur
Rs 21000 is the threshold limit for coverage and not for contribution. The Gross salary does not consist of overtime wages. But it will be considered for contribution. Therefore, if in respect of a covered employee (if the gross salary Rs 18000 the employee would be a covered employee) the total earnings including overtime allowance will qualify for contribution. Therefore, you have to deduct contribution on Rs 30000 and contribute contribution on the same 30000. You can exclude only travelling/ conveyance allowance. If you have provided uniform, obviously, washing allowance can also be excluded from contribution.
For the benefits payable to the employees, their total salary including overtime wages will be considered and as such the cash benefits that the employee gets will also be higher. Another logic for considering overtime wages for contribution is that the employee meeting with an accident during the extended time (overtime period) will get the cover of insurance.
Caution:
An employee is not expected to do overtime beyond a certain hours and there are limits for overtime. It depends on state rules in this regard and it shall be like 75 hours in a quarter (of four months) and asking employees to do overtime over and above this is illegal.
From India, Kannur
For the benefits payable to the employees, their total salary including overtime wages will be considered and as such the cash benefits that the employee gets will also be higher. Another logic for considering overtime wages for contribution is that the employee meeting with an accident during the extended time (overtime period) will get the cover of insurance.
Caution:
An employee is not expected to do overtime beyond a certain hours and there are limits for overtime. It depends on state rules in this regard and it shall be like 75 hours in a quarter (of four months) and asking employees to do overtime over and above this is illegal.
From India, Kannur
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