Hello Seniors,
Is the ESIC employee’s contribution rate of 1.75% is applicable on the regular gross salary(basic+hra+conveynce+etc.) or its also applicable to any kind of bonus received? By bonus I mean to say half yearly or annual bonus if I am receiving, then on that particular month will the contribution be calculated on the total amount or just the regular salary part?
This jan I received annual bonus of Rs 25000, and to my surprise they have calculated and deducted the ESIC contribution on the regular salary + bonus!!
Thnks for ur valuable inputs!!!!
Shom
From India, Gurgaon
1Is the ESIC employee’s contribution rate of 1.75% is applicable on the regular gross salary(basic+hra+conveynce+etc.) or its also applicable to any kind of bonus received? By bonus I mean to say half yearly or annual bonus if I am receiving, then on that particular month will the contribution be calculated on the total amount or just the regular salary part?
This jan I received annual bonus of Rs 25000, and to my surprise they have calculated and deducted the ESIC contribution on the regular salary + bonus!!
Thnks for ur valuable inputs!!!!
Shom
From India, Gurgaon
Dear Shom,
Plz read...
ANNUAL BONUS:
Bonus paid to the employees could not be treated as wage for the purpose of charging of contribution under Sec.2(22), provided the periodicity of the payment is more than 2 months. The said issue was also considered in the meeting of the ESI Corporation held on 19.12.1968 and the Corporation agreed to the recommendations of the Standing Committee that bonus may not be treated as wage. Hence no contribution is payable on annual Bonus.
(Earlier instructions were issued vide memo No.Ins.III/2(2)-2/67 dt. 8.2.1967).
As per ESI guidelines it is mentioned that Bonus is not a part of wage so no ESI deducton need to be done on it.....
From India, Gurgaon
Plz read...
ANNUAL BONUS:
Bonus paid to the employees could not be treated as wage for the purpose of charging of contribution under Sec.2(22), provided the periodicity of the payment is more than 2 months. The said issue was also considered in the meeting of the ESI Corporation held on 19.12.1968 and the Corporation agreed to the recommendations of the Standing Committee that bonus may not be treated as wage. Hence no contribution is payable on annual Bonus.
(Earlier instructions were issued vide memo No.Ins.III/2(2)-2/67 dt. 8.2.1967).
As per ESI guidelines it is mentioned that Bonus is not a part of wage so no ESI deducton need to be done on it.....
From India, Gurgaon
Hello Boss2966 & Kalpanayadav,
Thanks both of you for your help. I have sent a mail to my HR asking to look upon the matter. But I would also like to ask you, how can the process be reversed? Will ESIC be able to adjust the excess amount deducted? Around RS 600 in excess has been deducted from my salary by including the annual bonus and conveyance into the contribution calculation.
Please suggest me if any other steps I need to take.
Thanks for your help again.
Shom
From India, Gurgaon
Thanks both of you for your help. I have sent a mail to my HR asking to look upon the matter. But I would also like to ask you, how can the process be reversed? Will ESIC be able to adjust the excess amount deducted? Around RS 600 in excess has been deducted from my salary by including the annual bonus and conveyance into the contribution calculation.
Please suggest me if any other steps I need to take.
Thanks for your help again.
Shom
From India, Gurgaon
Mr. KalpanaYadav is right. As per the present policy of ESIC, annual bonus is not 'wages'. If the employer deducted contribution on annual bonus, that can be refunded to th employee. Amount deducted in January is to be remitted to ESIC by 21st February. So there is still time for payment. Even if it remitted, since the contribution period ending on 31st March is not over, the employer can adjust the excess paid contribution during the currency of the contribution period i.e. October to Feb. and balance only can be paid for the month of March. Such adjustments are possible before the expiry of the current contribution period, So, the employer can be requested for refunding the amount immediately.
From India, Hyderabad
From India, Hyderabad
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