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ESI deduction for Salary+Incentive
Human Resources » Industrial Law & Discipline

Chrm Message From: gayatri Total Posts: 33 Join Date: 09/06/2008
Rank: Executive Post Date: 14/05/2012 20:34:56 Points: 165 Location: United States
Dear All,
Its mandatory to deduct ESI from all employees whose salary is below a certain salary per month. Suppose if he is getting an incentive along with the salary and both the salary and incentive is above the ESI ceiling for this month and no incentive for the coming month. Are we supposed to deduct ESI from the employees in such a case where the salary plus incentive is above the ceiling . Another fact is that the incentive may not be same throughout the contribution period and some months even no incentive at all.
Please suggest whether I have to deduct ESI in the above case.
Thanking you in anticipation,

Chrm Message From: niharika.kapur Total Posts: 10 Join Date: 09/06/2008  
Rank: Beginner Post Date: 05/09/2016 07:51:45 Points: 50 Location: United States

Hi Gayatri,

I suggest that you first read the ESI Act and Respective documents of the State thoroughly. The ESI contribution must be deducted from the salary of an employee who is drawing _______/- and below, and it will continue to next ___ month whether he/she is drawing more than Rs. _______/- in any one month. If any fix amount is a component of the salary of an employee, yes you must consider the amount for the calculation of ESI contribution. 

Hope it helps.