Re: ESI & PF(overtime Wages) - Overtime Wages

Please clarify
Whether we have taken overtime wages for calculating esi pf or not
Thanks& regard
hekarthi

OT Wages are considered as wages for contribution for ESI,but not considered for excluding from ESI coverage.OT has no relevance for EPF.
Varghese Mathew

Dear karthi
It's very simple .
For ESIC - ESIC is calculated on the Gross ( So gross includes OT ). OT amount is included for calculating ESIC and salary (Gross) above Rs.15,000/- ESIC not applicable.
For PF - PF is calculated on only Basic + DA . OT amount is not included for calcualting PF.
Regards
B.Anand Kumar

Mr. Anand's conclusion is good. but the PF deduction is also depends on Basic + DA and if it is a bellow ceiling limit then the pf is also attract the contribution.

Dear Karthik,
Mr Varghese Mathew please permit me to elaborate on your statement
Wages = Rs.14000/- + OT = Rs.2000/-
For checking whether the employee is within ESI purview consider only wages which is Rs.14000/- (As this is below the ESI ceiling he will be under the purview of ESI coverage)
But while calculating contribution in respect of the employee you have to remit ESI contributions for Rs.16000/-. (Wages + OT)
For PF he has already responded
M.V.Kannan

Yes if his wages is Rs 14K then he shall be coverable under the Act. and contribution shall calculated on wages plus overtime, but i think subject Rs 15K, not on 16K.

Hi Karthik,
For calculation of ESIC, Gross Salary means Basic, DA, Conveyance,HRA, Special Allowance, all fixed components. Apart from the fixed components if any variable paid like Over Time, Incentice even this has to calculated for calculation of ESIC.Similarly if any Leave encashment and One time Bonus paid to any of the resigned employees and if ESIC applicability is there this should not be taken for consideration.
When it comes to PF, Total Wages represents only on Basic + DA.
No where, PF will impact on Overtime wages.
Thanks
Srinivasan
Resolve Business Services