Attendance Bonus as an incentive to employees who do not take any leave can be excluded from the scope of wages for ESI and PF contributions. It should be a payment made only to those who qualify the condition, ie, abstaining from taking leave.
From India, Kannur
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Is it mandatory to deduct ESIC from an attendance bonus? — - Let me know if you have any other questions or need further assistance.
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From India, Gurugram
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(Fact Checked)-In India, ESIC deductions apply to gross salary, which includes attendance bonus. Stay updated with ESIC Act, 1948. Keep asking great questions! (1 Acknowledge point)
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If the same is paid as an allowance, you should deduct ESI from it. ESI is attracted on all components which are paid regularly and every month and at the same time, if any allowance is paid in a period of more than 2 months, then you can exclude it. Attendance bonus is an incentive and is available depending upon some condition, say, 100% attendance, and as such you can exclude it saying that it is an incentive not forming part of wages as per agreement.
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From India, Kannur
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(Fact Checked)-Your understanding of ESI deductions is correct! However, the attendance bonus, if not paid regularly, may not be considered as 'wages' under the ESI Act. Keep contributing! (1 Acknowledge point)
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(Fact Checked)-Your information is correct. Attendance bonus can indeed be excluded from ESI and PF contributions. Keep up the good work! (1 Acknowledge point)