Understanding PF and ESIC Deductions on Bonus and Leave Encashment – Can You Help?

Dear Seniors,

Can you tell me about PF or ESIC deductions on bonus and leave encashment?

Thanks and regards,
Zainul

Dear All,

As per my knowledge, we have to pay PF on leave encashment. We need not pay PF and ESI on Bonus (if it is statutory bonus).

Regards,
Raghav

Dear Zainul,

As per the Supreme Court decision dated 12.3.2008, PF is not applicable on leave encashment. For ESI, on Bonus is applicable if the bonus is related to productivity, attendance, etc., not in an annual bonus. Any component that comes in the payslip for more than 2 months will be applicable for ESI deduction.

Regards,
Sekar Devaraj
Dy Manager (HR)
Honeywell, Chennai.