Understanding ESI Calculations: Does Employee Contribution Include Overtime Pay?

Hi,

Can anybody help me with how to calculate ESI? Is the Employee ESI contribution calculated on the gross amount? Does this gross calculation include the O.T. amount or not?

Waiting for your quick response...

Thanks,
Surendra

Under Section 2(22), read along with the case law Assistant Regional Director V Model Mill Nagpur, the following criteria apply for calculating ESI payments:

1) It must be considered as remuneration.
2) It should be payable in cash.
3) It must be in lieu of fulfilling the conditions of the contract of employment.

Therefore, overtime wages are also to be included in the calculation, as per all case laws.

Yes. Overtime amount should also be included for calculation but not for eligibility.

Govind Pawar