In our company if a staff is asked by the management to work on National/Festival holiday, he is paid 2 times wages on top of his normal wage. In this case, can we deduct PF on his holiday wage?
From India, Bhubaneswar
2From India, Bhubaneswar
Dear Sanjib,
PF is always calculated on the basic wages and also on the provided D.A (Daily Allowance) & R.A (Retention Allowance) if any, therefore incase any staff fm yours company work on any national/festival holidays then his basic wages are not going to be diffrent what he/she earns in a regular month and you would only pay him double the rate of normal wages for that holiday work done by him and this would be considered as Overtime done by that concerned employee.......therefore no PF would be deducted on this overtime payment, however if that concerned employee is covered under ESI (Employees State Insurance) then you would be required to deduct ESI amount on the overtime payment made to him for the extra work performed on the fastival/national holiday.
Hope I have clarified your doubt.....incase of any further clarification required, please do feel free to reach me at
and I would be more then happy to assit you.
Regards
Varun Chaudhary
From Hong Kong, Central District
PF is always calculated on the basic wages and also on the provided D.A (Daily Allowance) & R.A (Retention Allowance) if any, therefore incase any staff fm yours company work on any national/festival holidays then his basic wages are not going to be diffrent what he/she earns in a regular month and you would only pay him double the rate of normal wages for that holiday work done by him and this would be considered as Overtime done by that concerned employee.......therefore no PF would be deducted on this overtime payment, however if that concerned employee is covered under ESI (Employees State Insurance) then you would be required to deduct ESI amount on the overtime payment made to him for the extra work performed on the fastival/national holiday.
Hope I have clarified your doubt.....incase of any further clarification required, please do feel free to reach me at
Regards
Varun Chaudhary
From Hong Kong, Central District
The reply of Mr.Varun is right. The work done on national/ festival holidays would be considered as Overtime done and there is no need to deduct PF from the overtime payment. Regards, Sivadasan
From India, Udaipur
From India, Udaipur
esi wil be payable on O.t Wages irrespective of coverage if u r paying o.t to a exempted employee then also u have to deduct esi but that should to be on ot amount only .plz go through esic.nic.in and see the O.t definition there
OVERTIME ALLOWANCE
In the case of the employer as and when the employer finds the need to have work done expeditiously, in addition to the normal work during the course of the working hours, the employer offers to the employee to do the overtime work after the working hours. When employee does overtime work it amounts to the acceptance for the same, hence there emerges concluded implied contract between the employer and the employee. Both the remuneration received during the working hours and overtime constitutes a composite wage and thereby it is a wage within the meaning of Sec.2(22) of the ESI Act. Therefore, the contribution is payable on the overtime allowance. However, overtime allowances will be considered as wage for the purpose of charging the contribution only and will not be considered for the purpose of the coverage of the employee under the Scheme.
The same view was held by the Supreme Court in its judgement delivered on 6.11.96 in the case of Indian Drugs & Pharmaceuticals Ltd. Vs. ESIC, in Civil Appeal No.2777 of 1980.
(Old instructions issued vide memo No.3-1(2)/3(1)/68 dt. 31
From India, Delhi
OVERTIME ALLOWANCE
In the case of the employer as and when the employer finds the need to have work done expeditiously, in addition to the normal work during the course of the working hours, the employer offers to the employee to do the overtime work after the working hours. When employee does overtime work it amounts to the acceptance for the same, hence there emerges concluded implied contract between the employer and the employee. Both the remuneration received during the working hours and overtime constitutes a composite wage and thereby it is a wage within the meaning of Sec.2(22) of the ESI Act. Therefore, the contribution is payable on the overtime allowance. However, overtime allowances will be considered as wage for the purpose of charging the contribution only and will not be considered for the purpose of the coverage of the employee under the Scheme.
The same view was held by the Supreme Court in its judgement delivered on 6.11.96 in the case of Indian Drugs & Pharmaceuticals Ltd. Vs. ESIC, in Civil Appeal No.2777 of 1980.
(Old instructions issued vide memo No.3-1(2)/3(1)/68 dt. 31
From India, Delhi
Dear Sir,
I am working in Retail Industry As HR. i have a query. If any employee working on nation holiday company will pay double salary with compensatory off. and not deducted PF contribution on Extra wage / salary. but our company deducted PF on Extra payable Salary ( National Holiday\'s Salary). If you have any judgement or circular. pls. provide me.
Thanks & Regards
Santosh Rathod
08550906111
From India, Pune
I am working in Retail Industry As HR. i have a query. If any employee working on nation holiday company will pay double salary with compensatory off. and not deducted PF contribution on Extra wage / salary. but our company deducted PF on Extra payable Salary ( National Holiday\'s Salary). If you have any judgement or circular. pls. provide me.
Thanks & Regards
Santosh Rathod
08550906111
From India, Pune
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Holiday list for 2016.pdf
Central-Governm ent- of-India-Holida y-List 2016-page-001.j pg