Confused About ESI Deductions on Incentives? Let's Clear It Up Together

Dear all,

Whether ESI is deducted on incentives or not, there is a little bit of confusion.

Regards,
Rajnish Sapra

Dear Mr. Rajnish,

As per my knowledge, ESI will be deducted on gross salary only, not on incentives. Incentives are separate from salary.

Regards,
Sri

Hi Rajnish,

No one will deduct ESI from their incentives; it will be deducted through their salary.

Regards,
Ashwini K

Dear Rajnish,

In my opinion, if the incentive is being paid on a monthly basis, then ESI would be deducted. If the incentive is being paid every two months, then no ESI amount will be deducted on the incentive amount.

For further clarification, please visit the official website of the ESI department at www.esic.nic.in.

Thanks & regards,
Jony_M

Hi Friends,

According to me, the incentive will be added to your ESI deduction. As mentioned by our friend Jony, incentive is a part of your final salary, and whether you get it or not will depend on your performance. So whether you receive the incentive every month or once a month, ESI deduction will include the incentive as well. I hope this is useful for you. Try visiting the ESI website provided by Jony.

Regards,
Amith R.

If incentives are provided with every payout, then we have to deduct ESI on incentives. However, if we are paying incentives every 90 days, then there is no need to deduct.

Regards,
Mukesh Bhargava
Asst. Manager HR
[Phone Number Removed For Privacy Reasons]

Hi Team,

ESIC has some conditions on incentives: if we pay quarterly, then there is no need to deduct the ESI. However, if we are paying every month with salary or without salary, then we need to deduct the ESIC as per labor norms.

Thanks,

Mukesh Bhargava
Lead HR
CMS Info Systems Ltd.
8875151962

Hi Mukesh Bhargava,

Can you share the relevant circular/notification on quarterly incentives that do not form part of ESI calculation, please?

Kind regards,
C. Renuka