Employer's Contribution to ESIC: Should It Be Included in CTC Calculations?

Dear All,

I want to know if the employer's contribution to ESIC could be part of the CTC for the company or not.

Whatever money a company spends on an employee would come under the CTC. Some companies even include employer contributions for food or lunch in the CTC.

Regards,
Satya

Dear All,

I want to know if the employer's contribution to ESIC could be part of CTC for the company or not.

Generally, as far as the employee is concerned, it should not be a part of CTC. Many companies do follow the same practice. However, from the employer's point of view, it is also an expense towards engaging employees. Some companies consider ESI as part of the CTC. In my opinion, it should not be included because it is a mandatory payment by the employer towards compliance under the social security scheme.

In reality, only around 20-30% of Insured Persons (employees contributing to ESI) avail such benefits from ESI. The reasons for this are poor human and medical treatment of employees (Insured Persons) in many dispensaries, corruption, and bureaucracy in the attitude of ESI staff members/doctors. This is based on my 20 years of experience. Mr. Gandhi's statement to "Treat customers as VVIP" is only seen in hanging posters!

Thank you.

The ESIC contribution of the employee definitely forms part of the CTC of an employee who is under the purview of the ESI wage limit. It is the cost accrued by the company to the employee, irrespective of whether the employee avails the ESI facility or not.

Dear All,

Whether it should or should not be is a different matter, but the reality is that CTC includes all salary heads, including PF, ESI (both employee and employer contributions), bonus, LTA, Medical, and other benefits. CTC, in itself, determines every single penny of the organization's expenses on an employee.

This holds true within the organization where I am employed.

Thanks,
Vivek Mishra

Dear All,

CTC includes the following components: basic salary, HRA, conveyance, LTC, PF & ESI contributions, gratuity, bonus, and the value of perquisites like mediclaim policy, GPA insurance policy premium. The employer incurs expenses towards the concerned employees.

Thanks,
AK Sharma

Dear All,

CTC, which encompasses what a company provides to its employees, is known as Cost to Company (CTC). This includes:
- ESI/PF/company contributions
- LTA/Medical benefits
- Bonus
- Leaves
- Various welfare facilities such as canteen, uniforms, shoes, etc. However, management primarily considers these factors.

Devendra