Dear Member,
I would like to clarify the points regarding PF Contribution.
Minimum wages prescribes Basic + DA + Extra Allowance + Special Allowance(In case of certain category of staff)
PF contribution is calculated at 12 % of Basic + DA.
PF authorities insist that Basic + DA + Extra Allowance + Special Allowance have to be taken into account for calculating the PF contribution.
PF act Defines wages as means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-
(i) the cash value of any food concession;
(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
(iii) any presents made by the employer;
My question is
Is it mandatory that Extra/Special Allowance to be taken into account for Pf contribution.
Can anyone please brief me on this.
Would greatly appreciate your feedback.
Thank You
Aldrin X.Panakal
From India, Cochin
I would like to clarify the points regarding PF Contribution.
Minimum wages prescribes Basic + DA + Extra Allowance + Special Allowance(In case of certain category of staff)
PF contribution is calculated at 12 % of Basic + DA.
PF authorities insist that Basic + DA + Extra Allowance + Special Allowance have to be taken into account for calculating the PF contribution.
PF act Defines wages as means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include-
(i) the cash value of any food concession;
(ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
(iii) any presents made by the employer;
My question is
Is it mandatory that Extra/Special Allowance to be taken into account for Pf contribution.
Can anyone please brief me on this.
Would greatly appreciate your feedback.
Thank You
Aldrin X.Panakal
From India, Cochin
Dear Aldrin X Panakal
If a person is drawing more than Rs.15000/- and if you have proper break up, then you can deduct for less than Rs.15000/-. Normally the Minimum wages constitutes of Basic and Variable DA only and not other components. You pay any amount to the employee and if you make the PF Deduction to the amount equal to the Minimum Wages then no one can question you regarding the less payment. If you are paying the conveyance allowance, then keep the record as did by the TVS Group. (The TVS Group used to collect the back up data (tickets / Monthly Pass / Season Tickets) from the employees and accordingly they used to reimburse the conveyance allowance. After some time the management decided to rationalise the Conveyance allowance and they fixed as per the distance of the accommodation and fix the amount of conveyance allowance to the employees. When this was contested in the Madras High Court by the ESI authorities, the court has given the judgement in favour of TVS Group as they have the proper records and the reason for & system of rationalising the Conveyance allowance. If you pay the HRA please obtain the rent receipt from the house owner and keep the record of the same for which you need not to pay the PF or even IT.
Hope your doubt is cleared, and if you have any other please come out with your query and our members will help you in resolving.
From India, Kumbakonam
1168If a person is drawing more than Rs.15000/- and if you have proper break up, then you can deduct for less than Rs.15000/-. Normally the Minimum wages constitutes of Basic and Variable DA only and not other components. You pay any amount to the employee and if you make the PF Deduction to the amount equal to the Minimum Wages then no one can question you regarding the less payment. If you are paying the conveyance allowance, then keep the record as did by the TVS Group. (The TVS Group used to collect the back up data (tickets / Monthly Pass / Season Tickets) from the employees and accordingly they used to reimburse the conveyance allowance. After some time the management decided to rationalise the Conveyance allowance and they fixed as per the distance of the accommodation and fix the amount of conveyance allowance to the employees. When this was contested in the Madras High Court by the ESI authorities, the court has given the judgement in favour of TVS Group as they have the proper records and the reason for & system of rationalising the Conveyance allowance. If you pay the HRA please obtain the rent receipt from the house owner and keep the record of the same for which you need not to pay the PF or even IT.
Hope your doubt is cleared, and if you have any other please come out with your query and our members will help you in resolving.
From India, Kumbakonam
Dear,
As far as concern to special allowances and other allowances are still yet to be merged into calculation of 12% of PF. It is under discussion.
Hence, right now only Basic and DA is under that arean of 12% for PF calculation.
Rgds
From India, Mumbai
As far as concern to special allowances and other allowances are still yet to be merged into calculation of 12% of PF. It is under discussion.
Hence, right now only Basic and DA is under that arean of 12% for PF calculation.
Rgds
From India, Mumbai
Dear all,
greetings of the day!
i am working in an organisation with almost 30 employees, and we also have PF deduction scheme, but till date they have not share the PF account number with us. whenever we ask for they tell us that it is in process.
so please tell me how long does it actually take for an Pf account to be open
Regards
Gsya
From India, New Delhi
greetings of the day!
i am working in an organisation with almost 30 employees, and we also have PF deduction scheme, but till date they have not share the PF account number with us. whenever we ask for they tell us that it is in process.
so please tell me how long does it actually take for an Pf account to be open
Regards
Gsya
From India, New Delhi
Dear, Please help me to calculate salary like, We work from 9:00 AM to 7:00 PM for 6 days in a week with one hour of break time every day. if employee late more than 10 mnt they should work more 1 hour or 3 days late in a month half day salary not pay to them. There is weekly off but if they did not finish task, they should work more have to finish his task but salary is for 9 hours only
From India, Mumbai
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
PF Contribution on Leave Encashment - Clarification by EPFO.pdf