Balancing Salary Increases: How Can I Keep Employees Happy Without Raising Company Liabilities?

Hi,

I want to give an increment to the lower-level staff in my company. His PF and ESIC are being deducted. If I increase the salary, the company will have a liability of more deductions in PF and ESIC. Can anyone please help me with how I can keep the employee happy with his increment and the management happy by not increasing their liability?

Increment is linked to wages/salary; hence, you have to deduct ESI and PF. Anyhow, the CTC will be increased. There is no other way.

Regards,
Alphonse

Instead of raising basic wages, you can provide allowances (under any name). You can avoid contributing to the Provident Fund (PF) but not to the Employee State Insurance (ESI).

Dear friend,

PF has to be calculated on Basic and D.A., but ESI has to be deducted from the gross salary, except for washing allowance or traveling expenses actually incurred by the employee, or an incentive given once every three months.

Dear Kunjal Desai,

You may follow this guideline when offering increments to your employees. Please note that while offering increments in the form of allowances, ensure that the basic pay and D.A. of your employees are higher than the minimum wages.

Regards,
KIRAN KALE

Dear Friend,

P.F. & E.S.I. deduction is obligatory on the salary as per the statutory rules prescribed. You can do one thing only that just give voucher payment on a monthly basis by naming Mobile Allowance, Conveyance, Petrol Allowance, Subscription, etc. It will aside from obligation and cost to the company.

Thanks with regards, SUNIL WAGH HRD