Esic/ calculation - due to incentive the Gross salary gets beyond the ESIC slab

aisha-jasmin
I want to know that if we are giving incentive to the employee, and due to incentive the Gross salary get beyond the ESIC slab, above Rs. 21000 then will that employee is eligible for ESIC or not. If yes then what will be the calculation slab?
Ex. If the Gross salary of an employee is Rs. 20000 & Incentive is Rs. 4000 then the total Gross will be Rs. 24000. So in this case is he eligible for ESIC? If yes then will it be calculated on Rs. 24000 or Rs. 21000?
Ningthoujam I
Hi,
I would suggest you to go through the definition of wages and various other payments, including incentive, which are considered as part of the wages under ESI Act. Read this link for the definition: https://www.esic.nic.in/wages
As you are aware, the existing wage limit for coverage under the Act is Rs.21,000/- per month (w.e.f. 01/01/2017), and in your case, the employee is drawing more than wage limit for coverage i.e. Rs.21,000/- per month. Therefore the employee will not be eligible for ESI coverage. For more details about the coverage, please access this link: https://www.esic.nic.in/coverage
I think, unlike EPF, there is no voluntary contribution option available with ESIC. However for maintaining healthy industrial relations and harmonious work environment, you may want to take insurance policy for your employees which gives benefits similar or superlative to ESI benefits.
Trust this helps you.
Regards,
I.S.
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