Kalyan R
Deputy General Manager - Personnel
Sanjeev Kwatra
Epf/esi Consultant
Staffing Solutions
+1 Other

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Kindly let me know the Legal and statutory position with regard to the following points
1. What is the minimum basic and da to be fixed for gross salary of Rs.7500/ - Rs. 6000/- Rs. 5000/- Rs.4500/- Rs.3500/-
2. Can the bonus and gratuity and leave allowances can be apportioned as part of the salary and showed in the pay slip ?
3. What are all the allowances that are exempted from Gross Salary for calculating ESI

From India, Madras

1. The minimum Basic & Dearness Allowance to be paid to employees are contemplated in the Minimum Wages Act, 1948. Hence the Basic & DA should not be lesser than the one fixed by the Government. Hence go through the recent notification on Minimum Wages and decide. Soft copy is enclosed for your ready reference.

2. Bonus & Gratuity should not be shown in the Pay slips. Bonus payable to employees vary based on the performance of the company and bonus earnings. Similarly the eligibility of gratuity comes only on completion of 5 years of service. Only when a employee avails leave with salary/eligible leave, he will be paid for that day. Hence Bonus, Gratuity and Leave allowance need not be shown in Pay slip.

3. The allowances that are exempted from Gross Salary for calculating ESI are mentioned in Sec 2 (22) of the ESI Act. The extract of the same is furnished hereunder:

2 (22) "wages" means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes [any payment to an employee in respect of any period of authorized leave, lock-out, strike which is not illegal or lay-off and] other additional remuneration, if any 42[paid at intervals not exceeding two months], but does not include-

(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;

(b) any travelling allowance or the value of any travelling concession;

(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

(d) any gratuity payable on discharge;

Please revert to me if any clarifications are required.

Thanks & Regards

Kalyan R

Manager - Personnel

Sundaram-Clayton Ltd

Brakes Division, Chennai


From India, Madras

Attached Files
File Type: xls min._wages_tn_2007_196.xls (71.0 KB, 1532 views)

Mr. Kalyan, your post is very informative. However I am attaching a page scanned from the Mimimum Wage Act, 1948.
As per this the Mimimum Wage payable can contain allowances eg. HRA etc.as per the definition of Wage given. Please guide.

From India, New Delhi

Attached Files
File Type: pdf Definition of wage.pdf (361.7 KB, 1255 views)

Dear Sir,
Now u may fix basic and DA less then mim. wages as the same was decided in 7a case of M/s group 4 security. This is 4 ur kind information that HRA is also a part of Min. wages.
If u want the copy of the judgement u may mail me on
Sanjeev Kwatra

From India, Delhi
1. if my gross salry is 6000.00 rupees how i make a pay slip 3. What are all the allowances that are exempted from Gross Salary for calculating ESI
From India, Bangalore
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