Overtime Pay and PF Deductions: Should We Include ESI Too?

hrmonica
Dear Seniors,

Please confirm if we should deduct PF on overtime paid to employees. Also, would like to know about ESI.

Regards
arunmjadhav
No need to pay PF on overtime because nobody merges the overtime amount into the basic amount, so that question doesn't arise. However, you must pay professional tax on all wages, including the overtime amount.
sridhar_gnsh
ESI is applicable to pay on overtime if it doesn't exceed your gross to 15000.

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Adoni Suguresh
The payment of overtime is not a part of the wages as defined under the Payment of Wages Act. It is not necessary to include OT wages in the computation of PF contribution.

Adoni Suguresh
Labour Laws Consultant
hrmonica
Do we not deduct PF when paying arrears of Minimum Wages? Kindly clarify.
Adoni Suguresh
Dear Mrs. Chopra,

If any arrears are being paid against any increase or revision of the salary structure under the definition of Wages, in such a case, PF deduction is a must but not on the arrears payment other than wages.

Adoni Suguresh
Labour Laws Consultant
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