Dear Sir,

I have earlier provided the structure of my salary to obtain information regarding the new ESI rule. Can a company remove the medical allowance component if it is a part of my salary? I am receiving a salary less than Rs. 15,000/-, or should they only deduct 1.75% from my salary?

From India, Kanpur
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For details:

Basic Salary: $6,100.00
House Rent Allowance: $2,440.00
Flexi Allowance: $2,440.00
Leave Travel Allowance: $610.00
Medical Allowance: $610.00
Ex Gratia: $1,220.00
Conveyance Allowance: $1,500.00
Total: $14,920.00

And in the new salary slip for last month, see what happened:

Basic Salary: $6,100.00
House Rent Allowance: $2,440.00
Flexi Allowance: $2,440.00
Leave Travel Allowance: $610.00
Ex Gratia: $1,220.00
Conveyance Allowance: $1,500.00
Total: $14,310.00

Is this valid, or can it differ from company to company, as I have been informed by my superiors?

From India, Kanpur
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Hi,

You need to clarify whether Med All was in lieu of ESI contribution of the employer or part of the normal salary structure. If this was in lieu of ESI contributions and you have a written agreement/notice on this, in my opinion, you can remove and pay ESI contributions in lieu.

From India, Mumbai
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Hi,

If it is paid to all employees as a part of the salary, the company cannot remove the medical allowance component. However, if it is paid only to employees not covered under the ESI Scheme, the same can be withdrawn once they come under the ESI Coverage, subject to the written notice/agreement.

From India, Bangalore
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I think at the time of joining, you had been given the letter of CTC not for salary, so the employer's share in ESI will also be deducted from your salary. Please coordinate with your HR on this; hopefully, they will let you know the facts.

Regards,

From India, Delhi
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If Medical Allowance is paid at the interval of more than two months, then it cannot be included in the salary for the purpose of calculation of ESI eligibility & contributions.
From India, Tiruchchirappalli
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