Can I Include Overtime Payment in My Salary Slip Alongside Shift Allowance?

Please find attached the Salary Slip format for your reference.

I would like to inquire whether I can include overtime payment in the salary slip, considering that I have already accounted for it under the shift allowance.

Your prompt response would be highly appreciated.

Thanks & Regards,
Sujata

I am awaiting your reply as I need to issue the salary slip. In this regard, I would like to know if I can add overtime payment to the attached salary slip. Please reply.

Regards,
Sujata

You can certainly add the Overtime component in the payslip. But remember, if you are covered under the Factories Act or Shop & Establishment Act, you have to comply with the provisions contained therein. You have to make necessary changes in the computerized payslip as the Overtime component is included in the wages definition under the ESI Act, 1948, whereas no contributions are required to be deducted under the EPF & Misc Provisions Act, 1952.

Regards,
BS Kalsi
Member since Aug 2011

Overtime as a Shift Allowance: A Legal Risk

Showing overtime as a shift allowance is a potential minefield that you are creating. Legally, this amounts to not paying overtime. At any point in time, an employee or ex-employee can file a complaint asking for overtime (there must be records of the same). In such a case, you will have to pay double-rate overtime for the last 3 years and interest at 18%, plus a penalty. The fact that you paid a shift allowance is likely to be ignored by the court as there is nothing to show it was overtime. Overtime must be clearly stated (as per the Minimum Wages Act and Payment of Wages Act).

I read your comments, but I would like to know if I can show overtime payment as another allowance or if shift allowance is acceptable. We want to avoid any legal issues in the future. Please suggest.

Regards.

I read your comments. But I would like to know, can I show overtime payment as another allowance, or is shift allowance okay? As in the future, we don't want to be involved in any legal matter. Please suggest.

Till it is tested in court (where it depends on circumstances and how the lawyers argue it), we will not know... :)

From legal best practices, it is dangerous to call overtime by any name other than overtime. It can cause a problem at a later stage. So talk to your management and get the name changed back to overtime. Do not call it any other allowance.

Regards

Dear Sir,
The above conversation is very informative for the overtime. As we are into hospital and overtime is the major concern in case monthly salary generation. Still there are some doubts…
1. as overtime is not fixed it depends on the situation thus... still ESI applicable on overtime payment
2. can it be added in salary slip as we are going for HR module software
3. if yes then under which term
Request to please guide me and would appreciate your response asap.
Thank You

To create a salary slip when there is no PF, you can follow these steps:

1. Personal Information: Include the employee's name, employee ID, department, and designation.
2. Salary Details: Provide details of basic salary, allowances, deductions, and any other benefits.
3. Tax Deductions: Show the amount of tax deducted at source (TDS) if applicable.
4. Net Salary: Clearly mention the net amount payable to the employee after all deductions.
5. Company Information: Include the company name, address, and contact details for reference.

By including these components in the salary slip, you can ensure transparency and clarity in the payment process.