Dear All,
PF contribution is 12% on Basic+DA. We pay a lot of allowances such as HRA, Medical, Attendance, Telephone, conveyance, etc., and while doing so, we ensure compliance with Minimum Wages. Is there any provision or law that binds an employer regarding the allowances not exceeding a percentage of the total salary? Otherwise, an employer might pay maximum allowances with a small Basic + DA to avoid liabilities under PF, BONUS, GRATUITY Acts, etc.
Regards,
Suresh
From India, Nagpur
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10PF contribution is 12% on Basic+DA. We pay a lot of allowances such as HRA, Medical, Attendance, Telephone, conveyance, etc., and while doing so, we ensure compliance with Minimum Wages. Is there any provision or law that binds an employer regarding the allowances not exceeding a percentage of the total salary? Otherwise, an employer might pay maximum allowances with a small Basic + DA to avoid liabilities under PF, BONUS, GRATUITY Acts, etc.
Regards,
Suresh
From India, Nagpur
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Yes Suresh, Their is a law that 40 %of total ctc should be basic+merged da Thnaks and regards Jayendra Chaturvedi
From India, Gurgaon
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From India, Gurgaon
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Dear Jayendra,
It would be helpful if you could provide such ceilings with specific reference to Act/Rules.
Aside to Suresh: Lowering the basic may attract the attention of the PF inspector. It is not advised to go too low.
Regards,
Vishwanath
From India, Bangalore
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It would be helpful if you could provide such ceilings with specific reference to Act/Rules.
Aside to Suresh: Lowering the basic may attract the attention of the PF inspector. It is not advised to go too low.
Regards,
Vishwanath
From India, Bangalore
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Dear Suresh,
There is no specific law regarding this matter; however, I understand that some inspecting staff are insisting that Basic + DA should account for 50% of the Gross salary. To my knowledge, only the PF authorities should clarify this.
Regards,
Srinivas
From Germany
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There is no specific law regarding this matter; however, I understand that some inspecting staff are insisting that Basic + DA should account for 50% of the Gross salary. To my knowledge, only the PF authorities should clarify this.
Regards,
Srinivas
From Germany
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Dear Srinivas,
You're right. We have experienced difficulty in this respect. The inspection team has directed us to pay PF on other allowances since Basic is less than 50%. We are forced to change the structure.
Regards,
Vishwanath
From India, Bangalore
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You're right. We have experienced difficulty in this respect. The inspection team has directed us to pay PF on other allowances since Basic is less than 50%. We are forced to change the structure.
Regards,
Vishwanath
From India, Bangalore
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Dear Vishwa/Suresh,
You cannot cross the lower ceiling limit (40% Basic) in any salary structure. It is a guideline, which is a parameter-based for PF proceedings.
Thanks and regards,
Jayendra Chaturvedi
From India, Gurgaon
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You cannot cross the lower ceiling limit (40% Basic) in any salary structure. It is a guideline, which is a parameter-based for PF proceedings.
Thanks and regards,
Jayendra Chaturvedi
From India, Gurgaon
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Hi all,
As per the inspection conducted in our organization, the inspector informed me that if Basic+ DA is less than 6500/-, then it will attract special allowances such as food allowance, etc., as part of the wages. HRA and Conveyance are excluded.
Regards,
Anita
From India, Bangalore
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As per the inspection conducted in our organization, the inspector informed me that if Basic+ DA is less than 6500/-, then it will attract special allowances such as food allowance, etc., as part of the wages. HRA and Conveyance are excluded.
Regards,
Anita
From India, Bangalore
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Dear All,
This query needs a specific answer. We all experience the same type of difficulty, and the PF department just directs its way. Neither the employee nor the employer benefits as per the Social Security guidelines, and money keeps lying with the department. Requesting seniors to guide.
Regards,
Suresh
From India, Nagpur
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This query needs a specific answer. We all experience the same type of difficulty, and the PF department just directs its way. Neither the employee nor the employer benefits as per the Social Security guidelines, and money keeps lying with the department. Requesting seniors to guide.
Regards,
Suresh
From India, Nagpur
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