Whether it is CTC gross ( Including employer contribution to esic ,pf ) or ctc gross ( excluding employer contribution to esic ,pf ) Regards Narendra ch
From India, Chennai
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6From India, Chennai
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ESI is calculated on monthly gross salary paid & not on CTC.
From India, Mumbai
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From India, Mumbai
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Hi,
1. Sir, contribution under the provisions of the ESI Act, 1948, is calculated neither on "CTC gross" nor on "gross salary".
2. The contribution is payable on "wages" as defined under section 2(22) of the above Act. Since words like "CTC gross" and "gross salary" are nowhere defined in the above Act, hence such words are neither relevant nor applicable in deciding any matter concerning the payment of contribution under the above Act. Whatever is included or excluded in the meaning of the term "wages" in the above sub-section of the Act is relevant.
From India, Noida
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1. Sir, contribution under the provisions of the ESI Act, 1948, is calculated neither on "CTC gross" nor on "gross salary".
2. The contribution is payable on "wages" as defined under section 2(22) of the above Act. Since words like "CTC gross" and "gross salary" are nowhere defined in the above Act, hence such words are neither relevant nor applicable in deciding any matter concerning the payment of contribution under the above Act. Whatever is included or excluded in the meaning of the term "wages" in the above sub-section of the Act is relevant.
From India, Noida
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(Fact Checked)-The user reply is correct, providing accurate information on the calculation of contributions under the ESI Act, 1948 based on the definition of "wages" as per section 2(22) of the Act. (1 Acknowledge point)
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The concept of 'CTC' is unknown to the ESI Act and other labor laws. As Mr. Harsh Kumar said, please stick to the definition of wages under sec. 2(22) of the ESI Act as you cannot omit or include any item within the four corners of the definition.
B. Saikumar
HR & Labour Relations Adviser
Navi Mumbai
From India, Mumbai
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B. Saikumar
HR & Labour Relations Adviser
Navi Mumbai
From India, Mumbai
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(Fact Checked)-The user's reply is [B]correct[/B] as per the definition of wages under Section 2(22) of the ESI Act. No amendments are needed. (1 Acknowledge point)
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Sir, my question is regarding the applicability of components of CTC (in accordance with sec. 2(22) of ESI Act). For the calculation of contributions, we need to consider wages earned (in accordance with sec. 2(22) of ESI Act). Should employer contributions towards PF and ESI be excluded? Please correct me if my understanding is incorrect.
Regards, Narendra Ch
From India, Chennai
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Regards, Narendra Ch
From India, Chennai
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(Fact Check Failed/Partial)-The user's reply is partially correct. While the user correctly mentions considering wages earned for the calculation of contributions under the ESI Act, they should include both employee and employer contributions towards PF and ESI for applicability and calculation. Thank you for your input.
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For the purpose of the applicability of the ESI Act, the wages as per Sec.2(22) of the ESI Act are the wages earned by an employee every month, plus any payment made at intervals of two months but excludes the following:
1) Any contribution paid by the employer towards PF and ESI;
2) Any traveling allowance and the value of traveling concession;
3) Any amount paid to meet any expenses incurred by him by the nature of his employment;
4) Gratuity payable on discharge
5) Overtime wages.
Trust this will clarify your doubt.
B. Saikumar
HR & Labour Relations Adviser
Navi Mumbai
From India, Mumbai
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1) Any contribution paid by the employer towards PF and ESI;
2) Any traveling allowance and the value of traveling concession;
3) Any amount paid to meet any expenses incurred by him by the nature of his employment;
4) Gratuity payable on discharge
5) Overtime wages.
Trust this will clarify your doubt.
B. Saikumar
HR & Labour Relations Adviser
Navi Mumbai
From India, Mumbai
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(Fact Checked)-[B]Response[/B]: The user reply is correct regarding the exclusion of employer contributions to PF and ESI from the definition of wages under the ESI Act. (1 Acknowledge point)
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Dear Narendra,
In simple terms, any salary amount that reflects in your monthly payroll up to Rs. 21,000 will qualify for the deduction of ESI Contribution. (I hope you are not including the employer's contribution to ESI & PF in the monthly payroll). Therefore, do not confuse the gross salary or CTC when computing ESI and PF.
ESI has raised the coverage ceiling to Rs. 21,000 w.e.f. 01.01.2017, and you are raising this query just one year after; may I know the reason behind this?
Regards,
Suresh
From India, Thane
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In simple terms, any salary amount that reflects in your monthly payroll up to Rs. 21,000 will qualify for the deduction of ESI Contribution. (I hope you are not including the employer's contribution to ESI & PF in the monthly payroll). Therefore, do not confuse the gross salary or CTC when computing ESI and PF.
ESI has raised the coverage ceiling to Rs. 21,000 w.e.f. 01.01.2017, and you are raising this query just one year after; may I know the reason behind this?
Regards,
Suresh
From India, Thane
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(Fact Checked)-[response] (1 Acknowledge point)
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I agree with the views of 'Saiconsult', except for overtime wages. Overtime wages are also included in wages for contribution; however, overtime wages are not counted in the ceiling of Rs. 21,000/-. In other words, including overtime wages, one IP/IW may cross Rs. 21,000, and ESI contribution will be calculated on the whole wages, including overtime wages.
Rest all suggestions are as per the law.
From India, Bhubaneswar
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Rest all suggestions are as per the law.
From India, Bhubaneswar
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(Fact Checked)-The user reply is correct, with accurate information regarding the inclusion of overtime wages in ESI contribution calculations. (1 Acknowledge point)
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Yes, you are right, Bmpanigrahi. I did not notice that Narendra asked the query in connection with contribution. I thought the query was about applicability. I went through the query now to get it clarified. Yes, OT wages are included for the purpose of contribution but not for applicability. My earlier post stands corrected to this extent.
B. Saikumar HR & Labour Relations Adviser Navi Mumbai
From India, Mumbai
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B. Saikumar HR & Labour Relations Adviser Navi Mumbai
From India, Mumbai
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(Fact Check Failed/Partial)-The reply is incorrect. OT wages are not included in the calculation of employer contributions to ESIC and PF but are included in CTC gross for contribution purposes.
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CiteHR.AI
(Fact Check Failed/Partial)-The user reply is incorrect. ESI is calculated on the gross salary, including all components like basic pay, dearness allowance, incentives, and other fixed monthly payments, but not on CTC. Employer's contribution to ESI is also included in the calculation.