Gujarat Intrux Limited Head Hr & General
Working As Hr Profession
+3 Others

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Dear Seniors,
Greetings for the day,
I have a query regarding what is the calculation of overtime and is it included to calculate the ESI monthly contribution and Please tell me how it calculated,
is there any concept of OT1 and OT2 in ESI related to Overtime? If yes than what are there meanings and what are the differences between OT1 and OT2. How they going to be calculated in ESI Contribution?
Please guide me on this topic.
Thank You
Deepak Agarwal
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there is nothing like OT1 & OT2. it may be for understanding of your estt. only.
ESI is applicable when some one's monthly salary- washing allo. is less then 15000/- pm.if an emp. gets daily salary as 300/- so his monthly salary considered as 300*26=7800 and he is under the ceiling limit of ESI. all earning amount other then over time is considered as ESI wage. in upper case if he will get production incentive or any production bonus of even 12000/- then his ESI wage will 12000+7800=19800-washing allowance-earned OT amount.
There is no such thing as OT1 & OT2.
Esi is applicable on ot.
Esi is not applicable on allowance paid quaterly, hlf yrly or annual basis.
Bhavik Chheda
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
in case of overtime payments are making along with monthly wages, it attaracts ESI and we have deduct from the employee @Rs.1.75%, as well employer should Rs.4.75% has to be paid to the ESIC and statutory requirement to adhere.
Dear Deepak,

In most of the manufacturing units, OT is disbursed in two ways:

one is OT1 i.e 1+1 for example his salary for day is 100 then it will be 100+100= 200

Second one is OT2, it is normally paid on for working on holidays for example salary per day is 100 then 100+200=300

OT 2 is paid as per the holidays listed by the respective govt and also as per agreement between workers and management regarding some local holidays.

Presently, in my organisation , we are following as mentioned above with a restriction on OT 2.

Coming to the ESIC contribution : the OT should not be considered and added while ESIC limit 15000 for coverage purpose, as the OT is not regular income of the employee. For employees who are below salary 15, 000 and covered in ESIC and also drawing OT , then ESIC is to be calculated( Employee 1.75% and employer 4.75%), as all the components are included for deduction of ESIC contribution .

This how we are following in my industry.

You may wait for seniors views on this subject.


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