PF & ESI Deduction For OT

Let me know whether it is compulsory to deduct the PF & ESI amount paid thru OT. If any rule for deducting this amount?
Please help me.
Regards,
Mathangi.S

corrected.
OT does not attract PF, but will attract For ESI, Mathangi.
You will have 100's of discussion and posting in citehr with article and supporting....just search....
ukmitra

Hi Mathangi,
Pf deduction is applicable only on basic and DA and not on any other allowances. OT amount will not attract PF deduction but ESI will be applicable on OT.

Senior,
Pls. suggest what will happen if an employee is out of ESIC coverage ?
Rgds
HS Deshwal

Hi
If an employee is out of ESI coverage ESI deduction question does not arise
Tks & Regards
VADLAMANI SR

Only ESI calculation including OT amount but PF calculation only on Basic and DA not on Over time amount

if an employee is out of esic coverage, to safeguard the company you can take w.c. policy with any insurance agencies.
Regards
S.Gopu

Dear Friends,
We have Security Guards at branches who are supposed to work 6 days in a week and avail a days weekly off. Bank is providing 1/6 gross wages to the agency for each guard for the weekly off. The agencies have deployed the same guard for 30 days in a month and paid him his wage component to the Guard, retaining the 4 days ESIC & EPF with themselves. The agency has only deposited 26 days ESIC & EPF. Now the Security Guards are claiming the ESIC and EPF amount to be given to them which the bank has paid and held with the Agency. Requesting views from the members on this issue.
Capt. Saibal Ghosh
Asst. Vice President- Admin
Axis Bank Ltd, Kolkata

This is with reference to the question put up by Shri. H S Deshwal;
Suppose an employee's gross earned salary for a particular month is Rs. 9500. On the same month he also earns Rs. 1000 as OT(which is not a part of payroll earned gross). Then his gross total emoluments becomes 10500. "Which means he has crossed the ESI threshold limit of RS 10000 and as such ESI may not be deducted". This is a wrong notion because for the "purpose of coverage" of an employee (under ESI) OT should not be taken into account while determining the coverage eligibility based on gross salary. However for "deduction and remittance purposes", OT has to be included. This is the hairline difference between he term "Coverage purpose" and "contribution purpose". Best wishes.

Hi
Every one has given the right answer, PF deduction is not applicable on OT, but ESI deduction is applicable,and there are lot of court judgements to this effect