Question On OT/Arrear

Dear sir
Does overtime payment included in Esi deductions.is OT criteria for coverage of emloyee.
If my salary is 12000and OT is 6000 then on which payment there will be esi deduction.
& Arrear is also considered for esi deduction. suppose my salary is 10000/ and arrear paid is 6000 then my salary become 16000 of that particular month.
whether deduction will be on 10000@ 1.75% or on 16000(out of coverage)@1.75% or if arrear amt is 4000 then salry is 14000 then what is criteria.
Pls answer.
Regards
Vivek Kumar

[QUOTE=vivek.wadhwa;2078672]Dear sir
Does overtime payment included in Esi deductions. -Yes
is OT criteria for coverage of emloyee. - No
If my salary is 12000and OT is 6000 then on which payment there will be esi deduction.-18000
& Arrear is also considered for esi deduction. - Yes suppose my salary is 10000/ and arrear paid is 6000 then my salary become 16000 of that particular month. - ESI to de be deducted on 16000
whether deduction will be on 10000@ 1.75% or on 16000(out of coverage)@1.75% -
1.75% of 16000
or if arrear amt is 4000 then salry is 14000 then what is criteria. - 1.75% of 14000

Sir;
But i have seen that few companies dont include OT/Arrear/Bonus for esi deduction.
is it vary from company to company or mandatory under factory act.
but one question why company will add OT/Arrear/Bonus on gross salary it can also lead to their liability say ESI 4.75% on increased Gross salary.they can pay through cash payment also and reduce their liability.
Pls clear the doubt.
Regards

It's a statutory obligation to add arrears payment to gross salary
It will amount to payroll fraud to do it any other way.
In case you are paying arrears through voucher or cash,
1. The pf, esic departments can penalise you
2. The employee can claim the amount was never paid to him
Also, in Maharashtra, all payment of salary or wages exceeding rs. 3000 per month needs to be paid by bank transfer only. This is for any person getting a payment of more than 3000 a month and not for any single payment, so breaking up the payment into parts does not help either.