Hi all,
I have read extensively in our forum about overtime, how it is calculated, and the criteria. I still have some doubts that I hope to get clarified. My organization is in Underwriting services.
When we refer to Gross Pay, it includes Basic, DA, HRA, and all allowances. Does it also include the monthly performance bonus and shift allowance? When calculating ESIC, do we include the performance bonus and shift allowance in the Gross Pay? Is it the same for Overtime as well? Every month, I have a different gross salary due to varying shift allowances and performance bonuses. I am finding it difficult to fix the Gross salary for calculation.
Kindly help.
From India, Bangalore
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4I have read extensively in our forum about overtime, how it is calculated, and the criteria. I still have some doubts that I hope to get clarified. My organization is in Underwriting services.
When we refer to Gross Pay, it includes Basic, DA, HRA, and all allowances. Does it also include the monthly performance bonus and shift allowance? When calculating ESIC, do we include the performance bonus and shift allowance in the Gross Pay? Is it the same for Overtime as well? Every month, I have a different gross salary due to varying shift allowances and performance bonuses. I am finding it difficult to fix the Gross salary for calculation.
Kindly help.
From India, Bangalore
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Dear Shwetha.Spring,
For overtime work, you are liable to pay wages at the rate of twice his ordinary rate of wages. Shift allowance and monthly performance bonus are not to be included in the ordinary rate of wages. The same is not fixed. It is not paid to employees across the board universally, ordinarily, and necessarily.
The definition of wages under the ESI Act is different. Under this Act, whatever you pay additionally to an employee is considered wages when it is paid at intervals not exceeding two months.
Hope you are clear now.
From India, Mumbai
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For overtime work, you are liable to pay wages at the rate of twice his ordinary rate of wages. Shift allowance and monthly performance bonus are not to be included in the ordinary rate of wages. The same is not fixed. It is not paid to employees across the board universally, ordinarily, and necessarily.
The definition of wages under the ESI Act is different. Under this Act, whatever you pay additionally to an employee is considered wages when it is paid at intervals not exceeding two months.
Hope you are clear now.
From India, Mumbai
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