Inclusions in ESIC Wages

• Basic salary is fully included in the wage calculation.
  
• Dearness allowance is considered as part of ESIC wages.
  
• House rent allowance is included for contribution purposes.
  
• City compensatory allowance is counted towards gross wages.
  
• Regular attendance and overtime allowances are also included.
  

Allowances Considered for Contribution

• Night shift allowance or production incentive is included.
  
• Conveyance allowance paid as part of monthly wages is counted.
  
• Uniform allowance given regularly is included in wage total.
  
• Meal or washing allowance if paid in cash is considered.
  
• All fixed monthly cash benefits are generally included.
  

Exclusions from ESIC Wages

• Annual bonus or festival bonus is excluded from wage calculation.
  
• Gratuity payable upon termination is not included.
  
• Employer contribution to provident fund is not part of ESIC wages.
  
• Reimbursement of actual travel or medical expenses is excluded.
  
• Leave encashment paid at the end of service is not considered.
  

Treatment of Variable Components

• Incentives paid every month on a fixed basis are included.
  
• Irregular, unpredictable incentives may be excluded.
  
• Bonus linked to annual performance is excluded from monthly wages.
  
• One-time settlement payments are not included in ESIC calculations.
  
• The nature and frequency of payment determine its inclusion.
  

Employer’s Responsibility in Wage Reporting

• Employers must ensure accurate classification of wage components.
  
• All applicable inclusions must be reported in the monthly return.
  
• Payslips and wage registers should reflect ESIC-compliant structure.
  
• Any misreporting or omission may lead to underpayment and penalties.
  
• Monthly wage totals must align with the ESIC contribution sheet.