Do Overtime Comes Under Gross Salary? - CiteHR
Saswatabanerjee
Partner - Risk Management
Nathrao
Insolvency N Gst Professional
Pratheekshaa
Senior Manager - Human Resources
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Can anybody please help me out to understand whether "Overtime" amount is covered under "Gross salary"?
Ex :- If person A's salary is Rs.7200/- and he earned overtime amount of Rs. 600/-.
So, Do I consider his gross salary as Rs. 7800/- for deduction of Professional Tax of Rs. 175/-
OR Do I consider his gross salary as Rs. 7200/- and no PT deduction?
Please advice

OT will have to be included to work out PT.
1[(j) 'salary' or 'wage' includes pay or wage, dearness allowance and all
other remunerations received or receivable by any person including any
amount received by way of arrears of salary or bonus by whatever name
called whether payable in cash or kind and also includes perquisites and
profits in lieu of salary as defined in section 17 of the Income Tax Act, 1961.
Explanation.- (i) Where 'bonus' by whatever name called is received in
part or full, then such bonus shall be spread over for twelve months of the
year or to such number of months the bonus relates for purposes of
computation of 'Salary' or 'Wage' for such months.
This is an extract of Karnataka PT Act.

There is no Profession Tax act at national level.
So you need to see the profession tax of the state you work in.
Check the definition in the act to find out whether overtime is a part of definition of gross wages

Normally Over time is not considered as part of the salary or wage as it is not an allowance that is universally received by all employees as it is only those who work over time, will receive it and then there are many Acts both in respect of employment and Tax which define wages or salary differently for different purposes.Therefore you need to look into the specific Act, as the learned members above stated, to understand whether OT is treated as part of salary or income for the purpose of the said Act.As Saswata said Professional Tax Act is a State Act and you need to see your State Act to know whether to include OT for PT deduction or not.
B.Saikumar

yes, you need to deduct pt on full amount i.e. on Rs.7800/- as it is consider as earning gross salary
Salary includes pay or wages, dearness allowance and all other remunerations received by any person on a regular basis, whether payable in cash or in kind. It includes perquisites and profit in lieu of salary as defined in Section 17 of Income Tax Act, 1961, but does not include bonus in any form and account or gratuity. Overtime received is a part of salary. Even food subsidy falls within the scope of salary.
Salary includes pay or wages, dearness allowance and all other remunerations including over time wages, received by any person but does not include bonus in any form and account for payment of Profession Tax/ESI.
Professional Tax will be only on wages and salary earned. OT does not form part of wages
Hi Pl check the relevent Act in your State. You should go by definition of Salary under the Act. The definition will give you clear idea.
Hi,
In my opinion the OT should be a part of Gross and will effect the ESI.
Keep a track of OT for PF and ESI inspection. If the inspectors insist for avg ot to include in salary tell them very clearly no.

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