Dear Sirs, As per NEW SOCIAL SECURITY CODE, would the wage ceilings for EPF Contributions and ESI continue and will attract ESI contribution on 50% Allowance which are not part of wage as per latest WAGE DEFINITION. Kindly explain...
From India, Nizamabad
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@Tumati ESI is payable on gross monthly wages, even on Overtime paid EPF is payable on Basic+DA+SDA

Yes Sir. i completely agree with you, My question is pertaining to Wage Definition in Social Security Code.
As per ESIC - Wages allowances also attarcts ESIC COntribution, whereas ocial Security Code defines Upto 50% of allowances in wages are excluded. sothat ESIC contribution excludes this clause or not

From India, Nizamabad

As per the new Social Security code. in the definition of wages, components such as HRA, OT, Commission, and Travel allowance are excluded. Therefore liability of contributions of
employees and employers under EPF Act and ESI Act shall be reduced.

From India, Aizawl
No, it has not been excluded. If we read the 3rd para of section 2(clause 88) it is mentioned that if any payments made under sub clause a to i (exclusion list)exceeds 50% , the amount which exceeds will be part of wages

Esic is applicable on total gross salary which includes allowances what soever it is.
The wage code main crux is that if allowances is more than 50%, then the % exceeding more than 50% be merged into basic and DA.
So far no such notification is issued by epf or esic in the contribution limits and it is same.

From India, Vadodara
Dear all i am little bit confuse that the deduction of PF and ESIC is from basic salary or net salary
From India, Jaipur
PF % is calculated on BASIC ad DA..Where as ESI deduction is calculated on Gross salary.Hope this clarifies your doubt. Regards, priya
From India, Bengaluru
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From India, Delhi
I think that the question relates to the calculation of subscriptions to ESI and EPF schemes under the newly enacted Code on Social Security,2020. One of the salient features of all the four Labor Codes is that they provide for uniformity of interpretation of certain terms like 'wages' commonly occurring in all the Codes. The important aspect of the definition of the term 'wages' is that in general only those components of basic pay, dearness allowance and retaining allowance,if any should be considered as wages for the purposes of each Code subject to the condition of their sum total remains always at equal proportion to the sum total of the remaining components in the wage/salary structure. If the equality in the proportion is disturbed by lesser fixation of the inclusive components, it has to be restored by adjusting from certain excluded components specified in the definition.

Since the enforcement of the Codes and their Rules is awaited, let us wait and see how the treatment of subscriptions to the schemes of ESI and EPF is prescribed under the notifications to be issued by the Central Government in this regard.

From India, Salem

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