Clarification on ESIC Calculation
In our company, we have a gross salary that includes travel allowance and washing allowance. We need some clarification: should both components be included for the ESIC calculation, or is there any provision to exclude these components from the ESIC? Please advise.
Regards,
Jnkramn
From India, Chennai
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2In our company, we have a gross salary that includes travel allowance and washing allowance. We need some clarification: should both components be included for the ESIC calculation, or is there any provision to exclude these components from the ESIC? Please advise.
Regards,
Jnkramn
From India, Chennai
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Clarification on Exclusion of Allowances in ESIC Calculation
Section 2(22) of the ESI Act, which defines wages, itself excludes traveling allowance. As regards washing allowance, in my view, if it is paid to reimburse the expenses incurred by an employee because of the nature of employment, like wearing a uniform, it may be excluded. However, if it is paid to all employees as part of the salary, I am afraid it shall be included for contribution since it forms part of the first part of the definition of wages.
Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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Section 2(22) of the ESI Act, which defines wages, itself excludes traveling allowance. As regards washing allowance, in my view, if it is paid to reimburse the expenses incurred by an employee because of the nature of employment, like wearing a uniform, it may be excluded. However, if it is paid to all employees as part of the salary, I am afraid it shall be included for contribution since it forms part of the first part of the definition of wages.
Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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ESI deduction calculation on gross amount but some of the allowance are not include for ESI calculation like washing allowance, night shift allowance. only TA amount include in esi calculate.
From India, Kolkata
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From India, Kolkata
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Dear Mr. Abhijit I have doubt in Night Shift allowance. at the time of ESIC aufit they have advised to make necessary deduction for night shift allowances! We also practicing the same. Pls advise.
From India, Chennai
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From India, Chennai
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"Night shift allowance" is an additional remuneration paid to the employee for performing duty at night during the hours of darkness. This amount is paid as an incentive under the scheme of settlement entered into between the Management and its workmen and hence is considered wages within the meaning of Sec.2 (22) of the ESI Act. Therefore, ESI will be deducted on "Night shift allowance".
Thanks,
Brijesh Vishwakarma
From India
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Thanks,
Brijesh Vishwakarma
From India
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LEAVE ENCASHMENT NOT INCLUDED IN WAGES FOR P. F. CALCULATION.pdf
Method of calculation of wages.doc