ESIC and Annual Bonus Calculation

#FrequentQuestionAnswered

“Is annual bonus considered to be a part of the ESIC calculation in an employee salary?”

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Answer:
When calculating ESI, some of the components that include in an employee’s gross salary include Basic Pay, Dearness Allowance, City Compensatory Allowance, House Rent Allowance, Attendance & Overtime Pays, Meal Allowance etc.

However, does not include the components annual bonus, retrenchment compensation, encashment of leave and gratuity.

So annual bonus is not considered for ESI calculation.

In case of questions, feel free to ask in the comments below.

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Hi,

Salary regular components will attract for ESi calculation like Basic, HRA, FBP, Overtime etc. Components which are one time payment will not attract for ESI calculation like yearly Bonus, Incentives, Leave Encashment , Gratuity etc.

Hope with the above explanation your question is answered.

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