ESI Wages

Any incentives paid more than the interval of sixty days, esi ia not applicable on that incentives.

for your answer i would like to refer the definition of wages as per section 2(22) of ESI Act:-

(22) "wages" means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or lay-off and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include--

(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;

(b) any travelling allowance or the value of any travelling concession;

(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

(d) any gratuity payable on discharge.

The definition is in two parts, First part is inclusionve and second part whic exclude the wages from the contribution of ESI.

all remuneration which are payable to an employee in terms of service of contract as expressed or implied by the employer then such remuneration attract contribution of ESI will be treated as wages as per the definition.

or other additional remuneration which are payable to the employee for a regular period of two months will attract ESI contribution payment.

In view of this such kind of payment fall in additional remuneration an if you are paying commission or incentive regularly for 3 months like sale commision or incenstive for promotion of sale and production what ever be then contribution is payable on such commission or incentive whether it part of terms of payment or not.

But if you will pay this commission or incenstive annually then will not be treated wages for the contribution of ESI.

Hi,

thanks for clarification on ESI wages,

ersh.