Section 2(22) of ESI Act which defines wages itself excludes travelling allowance.As reagrds washing allowance, in my view,if it is paid to reimburse the expenses incurred by an employee becuase of nature of employment like wearing uniform, it may be excluded but if it is paid to all the employees as part of salary, I am afraid it shall be included for contribution since it forms part of Ist part of the definition of wages.
HR & Labour Law Advsisor
From India, Mumbai
Abhijit_BaruaESI deduction calculation on gross amount but some of the allowance are not include for ESI calculation like washing allowance, night shift allowance. only TA amount include in esi calculate.
From India, Kolkata
jnkramnDear Mr. Abhijit I have doubt in Night Shift allowance. at the time of ESIC aufit they have advised to make necessary deduction for night shift allowances! We also practicing the same. Pls advise.
From India, Chennai
“Night shift allowance” it is an additional remuneration paid to the employee for performing duty at night time during the hours of darkness. This amount is paid by way of incentive under the scheme of settlement entered into between the Management and its workmen and hence are wages within the meaning of Sec.2 (22) of the ESI Act.
Therefore ESI will be deducted on “Night shift allowance”.
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