Dear All,
If any firm or company pays bonuses to its employees on a monthly basis along with the salary, should the gross amount for calculating ESIC contribution include or exclude the bonus amount?
Regards,
Rakesh Gupta
From India, Jammu
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If any firm or company pays bonuses to its employees on a monthly basis along with the salary, should the gross amount for calculating ESIC contribution include or exclude the bonus amount?
Regards,
Rakesh Gupta
From India, Jammu
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Hi,
Bonus paid to the employees could not be treated as wages for the purpose of charging contributions under Sec. 2(22), provided the periodicity of the payment is more than 2 months. The said issue was also considered in the meeting of the ESI Corporation held on 19.12.1968, and the Corporation agreed to the recommendations of the Standing Committee that a bonus may not be treated as a wage. Hence, no contribution is payable on annual bonus.
Thanks
From India, Pune
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11Bonus paid to the employees could not be treated as wages for the purpose of charging contributions under Sec. 2(22), provided the periodicity of the payment is more than 2 months. The said issue was also considered in the meeting of the ESI Corporation held on 19.12.1968, and the Corporation agreed to the recommendations of the Standing Committee that a bonus may not be treated as a wage. Hence, no contribution is payable on annual bonus.
Thanks
From India, Pune
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Sir(s), The types of bonus-namely production bonus or incentive bonus etc. paid monthly are wages and contribution on said wages is payable under said Act.
From India, Noida
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From India, Noida
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Most of the times organization paid certain incentives or different kind of bonus apart from fixed wages which are excluded in ESIC contribution.
From India, Pune
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From India, Pune
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Thanks Maheshji, Kindly intimate me some of examples of "certain incentives or different kind of bonus" as mentioned by you in above remarks which do not form part of wages under ESI Act, 1948.
From India, Noida
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From India, Noida
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Dear All,
Thank you for replying to my question. However, the main issue is that the bonus amount is not a production bonus or any incentive bonus. This is the annual bonus amount that can be paid on a monthly basis.
Regards,
Rakesh
From India, Jammu
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Thank you for replying to my question. However, the main issue is that the bonus amount is not a production bonus or any incentive bonus. This is the annual bonus amount that can be paid on a monthly basis.
Regards,
Rakesh
From India, Jammu
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Please let the forum know if this Bonus is a part of CTC or as per the Bonus Act. If the Bonus, as part of CTC/Gross Salary which is paid on a monthly basis, is termed as Wages/Salary by the ESIC personnel, then it is liable for contribution.
This is my view; please wait for other seniors to respond.
From India, Ahmadabad
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This is my view; please wait for other seniors to respond.
From India, Ahmadabad
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Dear Sir(s),
By virtue of the provisions contained in Section 2(22) of the ESI Act, 1948, if any amount is paid at intervals not exceeding two months, then the same is considered wages and contributions are payable under the said Act regardless of the name of the allowance.
Annual Bonus is paid in accordance with the provisions of the Payment of Bonus Act, 1965, and calculations are based on the figures of accounts of a unit in an accounting year.
As an HR professional, the member can refer the matter to ESIC with full details of the said Allowance, also indicating how the same is calculated and paid. They can request ESIC to exempt their unit from paying contributions on such so-called annual bonus, which is actually reported as being paid monthly.
Please let me know if you need further assistance.
Best regards,
[Your Name]
From India, Noida
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By virtue of the provisions contained in Section 2(22) of the ESI Act, 1948, if any amount is paid at intervals not exceeding two months, then the same is considered wages and contributions are payable under the said Act regardless of the name of the allowance.
Annual Bonus is paid in accordance with the provisions of the Payment of Bonus Act, 1965, and calculations are based on the figures of accounts of a unit in an accounting year.
As an HR professional, the member can refer the matter to ESIC with full details of the said Allowance, also indicating how the same is calculated and paid. They can request ESIC to exempt their unit from paying contributions on such so-called annual bonus, which is actually reported as being paid monthly.
Please let me know if you need further assistance.
Best regards,
[Your Name]
From India, Noida
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I agree with Harsh. If any amount is paid on a monthly basis to employees, whether it is a bonus or leave encashment, etc., then ESIC should be deducted from those salary components.
Secondly, if the bonus is paid annually, then ESIC will not be deducted.
From India, Mumbai
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Secondly, if the bonus is paid annually, then ESIC will not be deducted.
From India, Mumbai
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Hi...all ESIC Max amount is 15000 , but my quire is if the employee getting his salary 20k including all the OT amounts . so how we pay to esic ?
From India, Hyderabad
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From India, Hyderabad
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It has to be deduct ESIC because OT is variable component and for ESIC deduction OT will not consider. So you have to deduct ESIC on 20K.
From India, Mumbai
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From India, Mumbai
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Dear All, Apart from Fix component of salary, every amount which paying as extract under any component shall attract ESIC. only statutory bonus shall not applicable for ESIC. Regards, Tushar Swar
From India, Mumbai
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From India, Mumbai
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Hi Rakesh,
First of all, I would like to inform you that all emoluments paid on a monthly basis will be considered for ESIC contribution up to Rs. 15,000. In the case of bonuses, all types of bonuses, apart from statutory bonuses, will be considered for ESIC contribution if the company is paying bonuses on a monthly basis.
Regards,
Sunil Sharma
From India, New Delhi
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First of all, I would like to inform you that all emoluments paid on a monthly basis will be considered for ESIC contribution up to Rs. 15,000. In the case of bonuses, all types of bonuses, apart from statutory bonuses, will be considered for ESIC contribution if the company is paying bonuses on a monthly basis.
Regards,
Sunil Sharma
From India, New Delhi
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Here I am sharing a blog regarding an income tax perspective of employee rewards and recognition (including bonuses) in India.
A Taxation Perspective of Employee Rewards and Supporting Payroll Softwares
Regards, Arti
From India, Faridabad
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A Taxation Perspective of Employee Rewards and Supporting Payroll Softwares
Regards, Arti
From India, Faridabad
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Sir have monthly fixed salary or rupees 13700 but apart of that I have receiving 25-30 thousand rupees as sales incentive..sir my question is that should I am eligible to be member of esi or not
From India, Kumbh
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From India, Kumbh
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