Hi Sir
I have some doubts in calculation of ESIC. So i am requesting you to please try to provide me your suggestions
In my company one employee is there his salary like this
Basic = 9800
Conveyance =800
Special Allowance=3400
TOtal gross = 14000
So every month i am deducting 245 rs (1.75% on 14000)as ESI
But in this june month he got extra Attendance bonus 1400 So his gross turns to 15400
So my doubt is according to ESIC is ESI is applicable on attendance bonus also
SO please try to provide me a solution on this
Thanks
Suneetha
From India, Vijayawada
5I have some doubts in calculation of ESIC. So i am requesting you to please try to provide me your suggestions
In my company one employee is there his salary like this
Basic = 9800
Conveyance =800
Special Allowance=3400
TOtal gross = 14000
So every month i am deducting 245 rs (1.75% on 14000)as ESI
But in this june month he got extra Attendance bonus 1400 So his gross turns to 15400
So my doubt is according to ESIC is ESI is applicable on attendance bonus also
SO please try to provide me a solution on this
Thanks
Suneetha
From India, Vijayawada
if its applicable then we need deduct the ESIC amount on 15400? for that month or we dont need to pay ESIC for that month. whats the solution
From India, Vijayawada
From India, Vijayawada
Dear Suneetha,
It is a special allowance being paid by certain employers to their employees to discourage the workers from absenting from the job. Any amount paid by the employer to its employees as Attendance Bonus will constitute wages under Sec.2(22) of the ESI Act and the same opinion was held by Bombay High court in the case of ESIC Vs. Indian Dyestuff Industries Ltd.. However, the periodicity aspect has to be kept in mind. In case the periodicity is more than 2 months, the same will not constitute wages and no contribution will be payable as in the case of incentive bonus.
Thanks & Regards
Atul Saklani
From India, Kalkaji Devi
It is a special allowance being paid by certain employers to their employees to discourage the workers from absenting from the job. Any amount paid by the employer to its employees as Attendance Bonus will constitute wages under Sec.2(22) of the ESI Act and the same opinion was held by Bombay High court in the case of ESIC Vs. Indian Dyestuff Industries Ltd.. However, the periodicity aspect has to be kept in mind. In case the periodicity is more than 2 months, the same will not constitute wages and no contribution will be payable as in the case of incentive bonus.
Thanks & Regards
Atul Saklani
From India, Kalkaji Devi
Dear Suneetha,
In addition to Atul's comment given above, any monthly components paid along with the salary are considered for calculating ESI as it constitutes the gross salary of the month.
Some things like Bonus and Leave encashment which are paid annually are exempted.
From Hong Kong
In addition to Atul's comment given above, any monthly components paid along with the salary are considered for calculating ESI as it constitutes the gross salary of the month.
Some things like Bonus and Leave encashment which are paid annually are exempted.
From Hong Kong
Dear Suneetha,
ATTENDANCE BONUS
It is a special allowance being paid by certain employers to their employees to discourage the workers from absenting from the job. Any amount paid by the employer to its employees as Attendance Bonus will constitute wages under Sec.2(22) of the ESI Act and the same opinion was held by Bombay High court in the case of ESIC Vs. Indian Dyestuff Industries Ltd..
However, the periodicity aspect has to be kept in mind. In case the periodicity is more than 2 months, the same will not constitute wages and no contribution will be payable as in the case of incentive bonus
From India, Madras
ATTENDANCE BONUS
It is a special allowance being paid by certain employers to their employees to discourage the workers from absenting from the job. Any amount paid by the employer to its employees as Attendance Bonus will constitute wages under Sec.2(22) of the ESI Act and the same opinion was held by Bombay High court in the case of ESIC Vs. Indian Dyestuff Industries Ltd..
However, the periodicity aspect has to be kept in mind. In case the periodicity is more than 2 months, the same will not constitute wages and no contribution will be payable as in the case of incentive bonus
From India, Madras
Dear Member
The issue raised by Ms Suneetha is coverage of employee under ESI Act if he exceeds his wages over and above Rs 15000/- pm during the contribution period. With my practical experience of more than 32 years in industry of Managerial level I can contribute this issue. As per proviso of the Act eligibility and coverage of every employee is to be decided at the beginning of contribution period i.e in the month of April and October. If employee draws wages less than Rs 15000/- the employee shall be within the definition of word employee and he will have to pay contribution for six month irrespective of the fact whether he draws wages more than Rs 15000/-. For the purpose of contribution all components of gross wages or salary will have to be into consideration. For more clarification the member may send query to me on my mail Id
Regards
Avinash Kanoray
From India, Pune
The issue raised by Ms Suneetha is coverage of employee under ESI Act if he exceeds his wages over and above Rs 15000/- pm during the contribution period. With my practical experience of more than 32 years in industry of Managerial level I can contribute this issue. As per proviso of the Act eligibility and coverage of every employee is to be decided at the beginning of contribution period i.e in the month of April and October. If employee draws wages less than Rs 15000/- the employee shall be within the definition of word employee and he will have to pay contribution for six month irrespective of the fact whether he draws wages more than Rs 15000/-. For the purpose of contribution all components of gross wages or salary will have to be into consideration. For more clarification the member may send query to me on my mail Id
Regards
Avinash Kanoray
From India, Pune
Hi,
I think I fully subscribe to Mr. Avinash\'s thinking. The coverage or otherwise is determined only at the entry months of April / Oct and any fluctuation in between will not affect. Likewise, even if there is dip, ESI will have to be deducted till the half year.
From India, Bangalore
I think I fully subscribe to Mr. Avinash\'s thinking. The coverage or otherwise is determined only at the entry months of April / Oct and any fluctuation in between will not affect. Likewise, even if there is dip, ESI will have to be deducted till the half year.
From India, Bangalore
Dear Mr. Avinash, With due respect to your comment, in above example on which amount ESI should get deducted? 14,000/- or 15,400/-
From India, Pune
From India, Pune
Dear suneetha,
whatever the employee earned as his gross salary, it should be applicable for ESI deduction excluding CONVEYANCE ALLOWANCE.
The concerned employee\'s salary structure for ESI deduction should be as
Basic - 9800.00
S.A - 3400.00
Total - 13200.00
ESI deduction - 231/- only instead of 245/-.
You may clarify this with your local ESI office.
Also, if an employee\'s wages exceeds 15,000/- (actual salary rate below 15,000/-), he should continue the ESI contribution at his earnings.
hope its clear.
Regards,
Krishna
HR & Admin
From India, Madras
whatever the employee earned as his gross salary, it should be applicable for ESI deduction excluding CONVEYANCE ALLOWANCE.
The concerned employee\'s salary structure for ESI deduction should be as
Basic - 9800.00
S.A - 3400.00
Total - 13200.00
ESI deduction - 231/- only instead of 245/-.
You may clarify this with your local ESI office.
Also, if an employee\'s wages exceeds 15,000/- (actual salary rate below 15,000/-), he should continue the ESI contribution at his earnings.
hope its clear.
Regards,
Krishna
HR & Admin
From India, Madras
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Bombay Anand Bhavan Restaurant-vs- ESIC SC 2-09-2009.pdf
ESIC Amendment.doc