Dear sir,
our company pay a salary on minimum wages and types of employee like skill, unskill, helper.
if we pay production base incentive (production bonus) to each employee for every month then it is parts of salary?
if yes then it is effective on ESIC & EPF?
any law for its calculation?
please give a suggestion.
Chetan.
From India, Raikot
5our company pay a salary on minimum wages and types of employee like skill, unskill, helper.
if we pay production base incentive (production bonus) to each employee for every month then it is parts of salary?
if yes then it is effective on ESIC & EPF?
any law for its calculation?
please give a suggestion.
Chetan.
From India, Raikot
Dear Mr Chetan
If you are paying Production base incentive on monthly basic, obviously ESI Contribution is required to be deducted from the salary of the Insured Person and the employer is alos required to pay his own contribution along with the Contribuiton of the Employees. If this production base incentive is being paid on interval basis and if it is paid in an interval of 2 and more then 2 months, then ESI Contribution will not required to be deducted and paid on Production base incentive. To save hard earn money of the employees and the employer, you are required to pay it atleast an interval of 2 months.
As far as question of Provident Fund Contribution belongs, it is further submitted that if you are paying monthly base production incentive, it is subject to Provident Fund Contribution and PF will be deducted. In a case titled RPFC V/s Daily Partap, Hon'ble Supreme Court of India has held that if production incentive is being given on monthly basis, provident fund contribution is chargeable upon that amount.
If it is being paid as an overtime amount, no provident fund contribution is required to be paid upon this amount.
Thanks
Regards
R B Yadav
Advocate
From India, Mumbai
If you are paying Production base incentive on monthly basic, obviously ESI Contribution is required to be deducted from the salary of the Insured Person and the employer is alos required to pay his own contribution along with the Contribuiton of the Employees. If this production base incentive is being paid on interval basis and if it is paid in an interval of 2 and more then 2 months, then ESI Contribution will not required to be deducted and paid on Production base incentive. To save hard earn money of the employees and the employer, you are required to pay it atleast an interval of 2 months.
As far as question of Provident Fund Contribution belongs, it is further submitted that if you are paying monthly base production incentive, it is subject to Provident Fund Contribution and PF will be deducted. In a case titled RPFC V/s Daily Partap, Hon'ble Supreme Court of India has held that if production incentive is being given on monthly basis, provident fund contribution is chargeable upon that amount.
If it is being paid as an overtime amount, no provident fund contribution is required to be paid upon this amount.
Thanks
Regards
R B Yadav
Advocate
From India, Mumbai
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