Dear all,
Our company is providing salary as follow....

Basic salary....
Over time........
Medical allowance.....
leave encashment paid monthly basis..
Incentiv to sales officer.....
Plz tell me which component will be included
or excluded for ESI deduction,
Plz revert..

From India, Basti

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The following items will form part of the wage both under Section 2(9) i.e for considering the employee for the purpose of coverage and Section 2(22) of the ESI Act for the purpose of charging of contribution:-

Matinee allowance which is being paid to employees in Cinema Houses.

Shift allowance paid to employees who work on shift duty at odd shifts.

Location allowance paid, in addition to Dearness Allowance to meet the high house rent.

Compensatory allowance.

Cash handling allowance paid to Cashier.

Supervisory Allowance.

Additional pay paid to training staff.

Charge allowance

Steno/Typist allowance

Plant allowance

Honorarium for looking after the hospital/dispensary

Computer allowance

Gestetner/Photocopier/Printer allowance

Personnel/Special allowance

Machine allowance

Convassing allowance

First-aid allowance

Personnel allowance - Pay over and above the basic wage and Dearness allowance for skill, efficiency or past good records.

Area allowance - given to employees living in a particular area to meet the high cost of living in that area.

Exgratia payment if payment is made within an interval of two months.

The following items will not form part of the wage either under Section 2(9) or under Section 2(22) of the ESI Act:-

Payment made on account of un-availed leave at the time of discharge.

Commission on advertisement secured for Newspapers, if not paid to the regular employee.

Fuel allowance/Petrol allowance

Entertainment allowance

Shoes allowance

Payment made on account of gratuity on discharge/retirement.

Payment made on encashment of leave.


r sudhakar

From India, Bangalore

In your salary structure all the components will attract ESI. Overtime is not a regular component of wages and therefore, it will not be counted for deciding whether the employee is covered under the ESI, but for a covered employee, contribution will have to be paid for wages including overtime wages. Similarly, if the incentives to sales officers is paid every month, then the same will be considered as wages qualifying ESI. On the other hand, if the incentives are paid quarterly (any period in intervals of more than two months) then the same will also be out of ESI.

From India, Kannur

Hello Madhu. T.K, Suppose if the incentive of April and May paid any time in june shall be out of ESI or not,
From India, Basti

If incentive is not paid monthly it will not attract ESI. If medical allowance is merely an allowance, it will attract ESI. Rest of the components will attract ESI. BTW hope you know about contribution periods. If you don't, please visit ESI website, it is critical info.
From India, Mumbai
i am paid monthly bonus than esic calculation on this amount
From India, Kolkata

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