hi all I have faced a interview in which i have asked that whether medical allowance include in gross salary and esi deduct on medical alownace or not regards sheena
From India, Delhi
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Sumit Garg1982
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I liked this question. Can you tell me the name of the Organisation, where you were invited for an interview. The question is confusing.
First, the medical allowance is usually given to an employee who is not covered under Employee State Insurance Corporation (ESIC), which means if employee drawing salary less than Rs. 10000 a month.
Thus, if the salary is less than Rs. 10000, the employee will be given benefit through ESIC, even then if the medical allowance is also given to an employee who is covered under ESIC, the ESIC (1.75%) will be deducted on medical allowance.
Usually, the medical allowance is given to employees not covered under ESIC and is part of their gross salary.
warm regards,
Umesh Chaudhary

From India, Delhi

There is thumb rule to decide whether an amount ( whaterver the nomenclature an organisation have for a salary heads) shall be wages u/s 2 of E.S.I. Act. or not is;
1. Any payment which is being paid to an employee with in the interval of two months shall be the wages for E.S.I. Contribution. (Whether it is bonus / Incentive / Conveyence/ any allowance whatever the nomenclature of head of salary. (Prior to April 2004 Conveyence was not the wages for E.s.I. Now if it is being paid regularly with monthly wages or with in the period of two months it comes under the purview of E.S.I. Wages)
Hope it will clarify the concept of wages u/s 2 (9) of E.S.I. for our all cite HR members.
Mohd. Arif khan

Sumit Garg1982

1.0 ESIC is mendatory field of payroll if the gross salary is equal to or less then 15000.
2.0 Medical allowance is option pay, which can be decided by company only.
3.0 Medical allowance is not part of gross salary. it is part of CTC.
4.0 ESIC cannot be deducted on Medical allowance.

From India, New Delhi
Thanks for your reply Sumit; but my question is still not answered.
My question is that the empoyee who is getting ESI benefit can also get medical allowance as well? That means employees getting salary below 15K can also get the benefit of medical allowance or not?
Kindly clear.

From India, Delhi

those salary is >15000/- p.m. then those employees must be excluded and be covered with insurence for medical, group and other.
From India, Ahmadabad
What if a company is providing both ESIC and medical allowance benefit to an employee below the salary of 15K? Is this correct?
From India, Delhi

Empoyer can covered Medical insurance to those ESIC covered employees.
ESIC covered establishment has to covered employees earning gross <=15000/-p.m. under ESIC scheme and rest to Medical insurance
ESIC covered employees will have additional Medical insurance coverage but work in deductions of Insurance from ESIC covered employees' salaries. Because both; ESIC and Medical insurance premiums can not be deducted.

From India, Ahmadabad

Yes. Medical allowance is also a part of gross salary for calculation of e.s.i.c. wages and it can be 8.33% of basic + d.a.
From India, Ahmadabad
Hello Everyone, Please advice, if employee is covered under E.S.I, can company given the allowance under head "Medical allowance"
From India, Mumbai

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