Are ESI Contributions Required for HRA, Medical, and Conveyance Allowances?

deveshch
Dear All,

One of our employees' salary structures includes HRA, medical, and conveyance allowances, which are fixed and paid on a monthly basis. Could you please clarify whether ESI contributions should be made on the above-stated allowances or not?

Regards,
Mohit
sandi_joshi
Dear Mohit,

Yes, ESI contributions shall be made on the above-mentioned allowances.
Exp Professional HR Admin Ops
ESI has to be paid on all the above allowances mentioned and any other allowance that you are paying with the salary. If your company provides uniforms to staff and pays a uniform washing allowance as part of the salary, then that amount can be excluded from ESI. No other allowances except the uniform washing allowance can be excluded from ESI payment. This update is effective until July 5, 2016.
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