Understanding ESI Wages: Which Allowances Count and How Salary Changes Affect Coverage?

Hi Seniors,

I am working as an HR manager in the hotel industry in Kerala. Is washing allowance included in the wages for the calculation of ESI contribution? What are the other allowances that are not included in the calculation of ESI contribution, and which allowances are considered for ESI wages? The ceiling is 10,000/-. If an employee is appointed as an accounts manager and his salary is 10,000, is he covered under the ESI scheme? If we increase the salary to 100,100, is he out of coverage, isn't it?

Regards,
beeyardas

Dear Mr. Beeyardas,

I am attaching a file containing the details you have inquired about. I hope you can find the help you need from the information provided.

Thank you.

Dear friend,

There is no need to deduct ESI wages for washing allowances. Even for shoe allowances, there is no requirement to contribute ESI wages. Rs. 10,000 is not covered under ESI.

Regards,
PT Rameshan