PF/ESIC DEDUCTION OF INCENTIVE - CiteHR
Lishadey
Hr Professional
Malikjs
Gm (hr)
HSINGH
Self Employed
Gawalipankaj
Officer Personnel & Admin
+3 Others

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hello friends,
I need ur guidance that do we need to Deduct PF & ESIC on Incentive?
We are paying incentive of APRIL- MAY & JUNE IN the month of july 10? do we need to deduct PF/ESIC on it.
Regards
Madhura

dear if you are paying incentice every month than you are required to pay ESI not PF but if you are paying on quarterly basis and not show as it is monthly than you are not reqd to pay ESi and PF
Dear Madhura,
Malik Sir is absolutely right. If you are paying the incentive monthly as allowance, you need to pay esi only, not pf. But you are paying it at intervals exceeding two months, not required to deduct esi/pf.
Regards,
Sanjay Gupta

Malik sir advice is correct, if you are paying incentive monthly then you need to pay ESI, not PF, but you can pay it quarterly to avoid deduction of ESIC. But this incentive is really incentive and you have to prove to Govt when they asked it practices and procedure. Because in my Company we are paying incentive without policy and procedure, the PF officer threatened us to file case against us. Then we made policy and procedure of the same and mentioned this in our union agreement.
Hi If you are paying incentive or Ex-gratia every month then you have to pay ESI only not PF if you are paying incentive or Ex-gratia quarterly, half yearly or yearly no need to pay ESI. Amit SEI
Dear All, I also agree if Incentive is paid monthly then PF & ESIC to be deducted ..... if it is paid in name of Variable and amount varies some time then PF & ESIC is applicable or not.
PF is calculated on Basic salary + DA. So incentive will not be a deducted on it.
ESI is calculated on gross.
Incentive is a part of gross salary if paid on a monthly basis and will attract ESI . Otherwise not.

Dear Malik ji
Can one pays lumpsum amount as Incentive instead of making OT Payments to avoid contributing PF Contribution .........?? Because at times PF Authorities object making OT stating as EVASION OF WAGES.
Regards
H Singh

Dear Friend, I agree with you point bt what is my doubt perhap one person’s gross 15500 k for the month of april bt next month he is getting 14500 means how can we mention in esi online.
If salesmen is getting basic salary 9600 pm, da 6820 pm, hra 6568 pm, incentives 5200, reimbursement of conveyance 10511 pm
should we deduct tds from his salary
annually he is geeting
basic = 115200
da = 81840
hra= 78816
incentives= 62400
reimbursement of conveyance = 126132
kindly help me plz


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