Dear Senior, good morning. My question is this: If the salary of an employee is ₹18,000 gross every month and he receives ₹12,000 in overtime every month, making a total of ₹30,000 deposited in the bank monthly, how much will ESI and EPF be deducted from the salary?
Regards,
Monu Dhiman
From India, Yamunanagar
Acknowledge(0)
Amend(0)
1Regards,
Monu Dhiman
From India, Yamunanagar
Acknowledge(0)Amend(0)
Hi Monu Dhiman, You must deduct ESIC at Rs.30,000/- because the employee Fixed wage is under 21k. and you include the OT wages also. Also please aware about the OT wages act.
From India, Karur
Acknowledge(0)Amend(0)
From India, Karur
Acknowledge(0)Amend(0)
Threshold Limit for Coverage and Contribution
Rs 21,000 is the threshold limit for coverage and not for contribution. The gross salary does not include overtime wages, but it will be considered for contribution. Therefore, if a covered employee has a gross salary of Rs 18,000, the employee would be a covered employee. The total earnings, including overtime allowance, will qualify for contribution. Thus, you have to deduct the contribution on Rs 30,000 and contribute a contribution on the same Rs 30,000. You can exclude only traveling/conveyance allowance. If you have provided a uniform, obviously, the washing allowance can also be excluded from the contribution.
Benefits Payable to Employees
For the benefits payable to the employees, their total salary, including overtime wages, will be considered. As such, the cash benefits that the employee receives will also be higher. Another reason for considering overtime wages for contribution is that an employee meeting with an accident during the extended time (overtime period) will get insurance coverage.
Caution on Overtime
Caution: An employee is not expected to do overtime beyond a certain number of hours, and there are limits for overtime. It depends on state rules in this regard, and it should be around 75 hours in a quarter (of four months). Asking employees to do overtime over and above this is illegal.
From India, Kannur
Acknowledge(0)Amend(0)
Rs 21,000 is the threshold limit for coverage and not for contribution. The gross salary does not include overtime wages, but it will be considered for contribution. Therefore, if a covered employee has a gross salary of Rs 18,000, the employee would be a covered employee. The total earnings, including overtime allowance, will qualify for contribution. Thus, you have to deduct the contribution on Rs 30,000 and contribute a contribution on the same Rs 30,000. You can exclude only traveling/conveyance allowance. If you have provided a uniform, obviously, the washing allowance can also be excluded from the contribution.
Benefits Payable to Employees
For the benefits payable to the employees, their total salary, including overtime wages, will be considered. As such, the cash benefits that the employee receives will also be higher. Another reason for considering overtime wages for contribution is that an employee meeting with an accident during the extended time (overtime period) will get insurance coverage.
Caution on Overtime
Caution: An employee is not expected to do overtime beyond a certain number of hours, and there are limits for overtime. It depends on state rules in this regard, and it should be around 75 hours in a quarter (of four months). Asking employees to do overtime over and above this is illegal.
From India, Kannur
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
ESIC Cealing Wages 10 to 15 Thousand.pdf