Dear sir I have a doubt so many companies still make PF payment only on basic - is there any action for the PF department?
From India, Hyderabad
From India, Hyderabad
Hi Manikanta,
This is very much irregular. Concerned employees should take it up with their employers to rectify the error.
The Employees Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) defines basic wages to include any other allowance similar to dearness allowance, house rent allowance, etc, payable to the employee in respect of his employment or work done in such employment.
As per Section 2(b) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (Act), Basic Wages mean 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.
An EPF account is mandatory for all employees with a basic salary up to `15,000 per month in firms employing more than 20 workers.
The contribution paid by the employees is 12 per cent of basic wages plus dearness allowance plus retaining allowance. An equal contribution is payable by the employers also. If the basic pay is less than Rs 15000 then 8.33% of that full amount will go into EPS A/c. However, Hon'ble Supreme Court of India vide its judgment dated 28/02/2019 held that all amounts, whether or not categorized as "allowances", if paid equally across the board to all employees, should be considered as part & parcel of the "basic wage" for the purpose of calculation of provident fund ('PF') contribution under section 6 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
From India, Bangalore
1077This is very much irregular. Concerned employees should take it up with their employers to rectify the error.
The Employees Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) defines basic wages to include any other allowance similar to dearness allowance, house rent allowance, etc, payable to the employee in respect of his employment or work done in such employment.
As per Section 2(b) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (Act), Basic Wages mean 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.
An EPF account is mandatory for all employees with a basic salary up to `15,000 per month in firms employing more than 20 workers.
The contribution paid by the employees is 12 per cent of basic wages plus dearness allowance plus retaining allowance. An equal contribution is payable by the employers also. If the basic pay is less than Rs 15000 then 8.33% of that full amount will go into EPS A/c. However, Hon'ble Supreme Court of India vide its judgment dated 28/02/2019 held that all amounts, whether or not categorized as "allowances", if paid equally across the board to all employees, should be considered as part & parcel of the "basic wage" for the purpose of calculation of provident fund ('PF') contribution under section 6 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
From India, Bangalore
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Online payment of PF mandatory from 1.1.2016.pdf