I Am Kanika Working As Hr In A Manufacturing Company

I wanted to ask whether overtime allowance is included in gross salary for esi deduction or not and secondly if monthly salary of a person is increased from 14000 to 18000 monthly then on wht salary is esi deducted

- Yes overtime salary is a part of gross salary, and ESI must be deduct on it
- if 14000 goes to 18000 , then also you have to deduct ESI on total gross of Rs.18000 (1.75% from employee) and company needs to add it part of 4.75% on 18000 gross salary.
I hope your confusion is cleared now.

Respected Sir ,
I wanted to ask furthur if the salary is increased(from 14000 to 18000) in between any of the contribution period of esi eithet april-sep,oct-march then also esi will be deducted on rs 18000 till tht contribtion period ends??

Sir,

But the Esic coverage is upto 15000/- gross salary,then how can we deduct on 18000/-.Please clarify my doubt

ESI have to deduct for over time wages but it should not mention in gross workings, keep it in separate input for OT wages and secondly you\'ve mentioned 14000 to 18000 so probably as per ESI Act limit is less than Rs.15000/-(Gross)have to deduct, Incase the employee wage had been increased in middle of the contribution it means \"Apr to Sep\" & \"Oct to Mar\" we have to deduct full wages(gross) what he earned or earning upto that contribution gets completed....

Dear Kanika,
The Esi ceiling is upto Rs. 15000/-. You have to pay the ESI contribution on Overtime also, but should not consider for ESI ceiling amount. If an employee cross the ceiling amount of Rs. 15000/- till the next contribution period ( it is from April - September and October to March) you have to deduct contribution and pay. Washing Allowance( if you provide uniforms) and Conveyance( it depends on quantum) are exempted from ESI contribution.
Hope this clarifies your doubt.
G.K.Manjunath,
Sr. Manager-HR

Dear Kanika,
Pl.go thro' the attachment for definition of "Wages/salary" for ESi.
The ongoing ESI contribution should continue till the close of the half yr. period if his salary has been increased > Rs.15k in between. Supposing his salary was increased before 1.9.12 then there is no need to continue from Sept.12. On the other hand his salary increased > Rs.15K from 1.9.12 then U have to continue upto 31.3.2013 and discontinue thereafter. Is't clear.
For any clarification U can check back ESI web site or citeHR links where this subject was already discussed.
Regards,
kumar.s.

Wages include other additional remuneration paid at intervals not exceeding 2 mths wages. Normally overtime payment has to be seen in detail in the particular company as to whether it is considered as additional one. Also definition of Employees in this act is in detail and had to be considered accordingly which is very wide unlike other respective statutes. The referance of wages only is made in the Act. The Employees' State Insurance Act, 1948; is among the first major legislation promulgated on Social Security in Independant India. The acts are also available with commentary which is a must compendium for HR professionals in any concerned units.

limits for esi is 15000/-, it is on gross wages but not deduct on washing allouws. if employer has provided dress.
I think am i right, please seniors suggest me.
regrads
DSP

WASHING ALLOWANCE:
It is a sum paid to defray special expenses entailed by the nature of employment and as such this amount does not amount to wages.
(In lieu of old instructions issued vide Memo No.Ins.III/2/1/65 dt. 8.2.1967)