Understanding Conveyance Reimbursements: Do They Affect Total Earnings and ESI Calculations?

Dear Seniors, I need your advice on our pay structure. We have conveyance reimbursements as a part of the salary pay, which varies from month to month depending on their travel and submission of bills. My doubt is, do conveyance reimbursements come into total earnings, and is ESI calculated on that or not?

Thank you in advance.

Dear Bhandhavi, The conveyance allowance, if you pay, then you need to pay. But it is only reimbursement (meaning the employee has already spent, and you are making good of the conveyance expenses). So it should not be added to his salary slip, and it must be paid on vouchers and maintained separately.

Even for the conveyance allowance, we need not pay the ESI contribution (provided your location is in Chennai or in Tamil Nadu) for which I am attaching the Chennai High Court Judgment Copy on Conveyance Allowance - which I got downloaded from this site itself. Hope it will be useful for you.

All the best Regards

As mentioned by Bhaskar, conveyance reimbursements are not part of CTC. They will not fall under the purview of Gross earnings as the amount was spent for official purposes.

Regards,
Pon