Is it necessary for admin to take overtime earnings into account when calculating wage limit?

Created by Product Content Team, Modified on Fri, 15 Mar 2024 at 03:10 PM by Product Content Team



No. As overtime earning is not a regular and continuous payment, it cannot be considered while calculating the wage limit. However, while considering the gross for contribution, it can be included.


For example, let us assume an employee gets a salary of Rs. 20,000. As per the revision, this employee will be covered under the ESI Scheme.


Next, let us assume that the employee has worked for overtime on a particular month. Hence, based on the overtime the monthly wage has turned out to be Rs. 24,000 for that particular month. So in such a scenario, Rs. 24,000 will not be considered while calculating the wage limit for the ESI Scheme. But, this amount will be considered while calculating the gross for the contribution.


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Related Links:

Video- To watch the video on the Bank/PF/ESI page, click here.

FAQs- To read more FAQs about ESI, click here.

Documentation- To learn more about the ESI page, click here.

Product Update-To read about the product update, click here.

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