Casual salary

691 views 3 replies

Can anyone help me on the following query?

My Company is a manufacturing of Garments. Every month new labor appointed but we are not taken them as employee of the company for first 2 month, after 2 months they will be considered in company payroll.

But the payment for intial 2 months is never accounted due to PF/ESI procedure.

Can we account it other than salary? Last year is almost more than Rs50 lac

 

 

Replies (3)

No, we have to consider it a 

salary...............

Yes, you can account as contractual salaries deducting TDS @   1% and the expenditure is allowed. If the amount paid to each labourer does not exceed the limit, till they are taken on roles (ie 2 months) no need to deduct TDS.

If we accounted it as salary then we have to deduct PF/ESI and firm contribution.

If we are not deduct PF/ESI then contribution/penalty/interest will be impose by ESI/PF department because PF/ESI also applicable to contact labor.


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