Monica_p
Consultant
Harpreetwalia
Consultant-labour Laws
+1 Other

Respected all,
I\'m a contract staffing vendor. I have received a new client, who have certain number of employees whose basic salary is less than 10000, and incentives nearly 20000,. Since these employees are loaders, the company want to include them in the esic scheme. Kindly suggest me a way to create a salary splitting, with this figure, including in esic.
Thank you

From India, Edapal
ESIC is calculated on basic salary. Incentives are not a part of the salary structure (as they are variable). So you can go ahead and create a salary structure based on their basic salary.
Hope it helps!!!

From India, Pune
Hi,
All variable+fixed component attracts ESI. The ESI is calculated on gross irrespective whether it is basic, hra ,ca etc.
In order to avoid the issue you do have, kindly start paying your incentives on quarterly basis as this doesn\'t attract ESI. For eg incentives of jan,feb and march are to be paid our with salary of april which will be paid on the fixed salary date of may.
Hope this will help you.

From India, New Delhi
Dear,
Esi is subject to deductible on the wages that an employee earned on regular basis i.e. Basic, HRA, Conveyance, Special All & etc. Also please note that the payment apart from the above made to an employee having its periodicity less than two Months shall also be considered as wages i.e Incentive, OT & Commission thus it shall also attract ESI.
Now, what i understand from your query that is related to the coverage and it seems there is slight confusion between wage & incentive. Please note that variable incentive paid to the employees should not be considered for the employee coverage in ESI such as the ceiling limit of Rs.15000, as because it is variable in nature.
I hope it will clear all your doubts. In case you still need further clarification please write.
Regards,
Pushkar Bisht

From India, Delhi
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