ESIC Contribution Confusion: Do Bonuses in CTC Affect Your Liability?

Dear Senior,

Please help me in clarifying the ambiguity that I am having regarding ESIC contribution. Do additional bonuses attract ESIC coverage and contribution if it is a break-up part of CTC? I am facing a problem while determining the contribution liability.

Regards,
Mohan

Clarification on Bonus and ESIC Contribution

Bonus paid in accordance with the Payment of Bonus Act is neither a part of the salary for the purpose of eligibility coverage of ESI nor the calculation of ESI contribution. However, at the same time, if the bonus is included in the salary on a monthly basis, the same will be treated as part of the salary. This is one of the basic problems with the CTC concept of the salary structure. Therefore, remove the bonus part from the monthly remuneration payable and pay the same separately under the head "Bonus," preferably at intervals of more than two months.

Regards,
Madhu.T.K

Hi,

Please help me with this. If a company pays advance bonus (per month) or advance against bonus (per month) as a part of CTC, will this bonus be included in the gross salary when computing ESIC?