hi all can anynody tell me what is over time , it is the part of gross salary,and esi also deduct on overtime
From India, Delhi
Seasoned Ir Professional
Sr. Manager-hr &ir
Gm (hr)
+3 Others


if some one works more than 9 hours a day or 48 hours in a week.that extra work done by individual is called overtime and it is to be compensated with double rates of wages.u have to deduct ESI on it and OT is not part of gross salary.
j s malik

From India, Delhi

O T mean who will work more than his duty hours. We shall pay the over time for that extrac hours with double rates . we have to deduct ESI on OT. But O T is not part of gross salary. But it will counted as contribution and calculated ESI daily rate.

From India, Guntur

thanks for
ur answer
i know the meaning of ovetime , and we are paying double for that,but i want to know how can we deduct ESI on OT
a Worker whose salary 3073, and his OT is 40 hour than what is his ESI Deduction
on 3073 @ 1.75 and OT 40*2* ?????

From India, Delhi

ESI will be deducted from the total salary including the OT amount. There may be months during which the salary of an employee may exceed Rs 10000 (the limit for ESI) Still in that month also the contribution payable by the employee @ 1.75% of such increased amount shall be deducted. Similarly, the employer has to contribute @ 4.75% of the total wages including the OT amount.
However, for deciding the eligibility of an employee under the ESI, the OT will not be counted. Therefore, one whose salary including OT becomes more than Rs 10000, he is not exempted from ESI.
In your case the salary is Rs 3073
OT amount 2 times the hourly rate, ie, 3073/30/8 X 40 =1024
Total salary = 3073 + 1024 = Rs 4097
ESI -Employee's share = 71.70
ESI Employer's share = 194.6

From India, Kannur
Dhanashree Pitale
Dear Mr Madhu, Thank you for sharing such an elaborate working of ESI and OT. I knew the concept but now you have added to it with the practical implementation. Thanks again. Regards Dhanashree
From India, Mumbai
I am totally confused.If the salary of an employee is say 6000 pm.He has done an OT of 2 hrs per day (everyday) during the month..How will the calculations b done.
Dear Madhu can you please explain: In your case the salary is Rs 3073
OT amount 2 times the hourly rate, ie, 3073/30/8 X 40 =1024 ?? what is 8 & 40 ??
Total salary = 3073 + 1024 = Rs 4097
ESI -Employee's share = 71.70
ESI Employer's share = 194.6.
Waht is 1.75 & 4.75%

From India
Dhanashree Pitale
I guess you should read the complete communication. It says that total overtime is of 40 hours. Now if your monthly salary is Rs 3073, then to calculate per hour rate of salary, you will have to compute 3073/30 = 1 day salary. Say this figure is Rs X. Then X/8 (assuming that it is an 8 hours/day, as it is normally)will give you salary paid per hour. Say this amount is Rs Y. So Y * 40 * 2 = total amount to be paid for OT.
According to the ESI Act, any person who is drawing wages below Rs 10, 000 p.m (this revised limit was made effective @ 2 yrs back) is covered under ESI Scheme. In this scheme, employee contributes 1.75% of his salary towards ESI Fund and employer contributes 4.75% of the salary. Refer Section 2 (clause 9), Chapter IV - section 39 of Employee State Insurance Act, 1948.
I hope your doubts are clarified now.

From India, Mumbai

Dear All,
1.Can any one tell me what are all the various components of salary for which ESI has to be paid. Also let me know the various allowances like Conveyance , O.T, Incentives and so on for which ESI has to be paid or not.
2. My second question is , X salary is 15000 ; therefore he is not covered under ESI. A sum of 5000 is paid to him as incentive . Do we have to pay ESI for X. If so on what amount ESI has to be paid ?

From India, Madras

If the Incentive is been given for quarterly more than quarter period then this is not part of gross salary ( i.e. not a part of ESI wages ).
If it been paid less than quarter period i.e. monthly / bimonthly then this amount should be considered as ESI wages.
In case of any query please feel free to call Prashant -9850401160 ( Pune - Maharashtra )

From India, Pune

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