I have an employee who is on minimum wage. His basic% is 55% of the minimum wage. On which amount would the PF be deducted? Please share the law mentioning this, if any and if possible
From India, Mumbai
From India, Mumbai
How can you say that his basic wages is 55% of the minimum wages? If you have a wage structure without Variable DA but with total salary equal to the minimum wages, that total salary should be taken as base for calculating PF, Gratuity, leave encashment etc. the act of not paying VDA and keeping basic wages low, but paying some other components to meet the minimum wages will be deemed to be deliberate attempt to reduce the burden of paying statutory payments to employed persons. Therefore, if the total salary does not exceed Rs 15000, no way can you pay the PF on Basic alone.
From India, Kannur
4238From India, Kannur
So in that case, say the salary of a person is 17000, the basic is 55% while the remaining 45% is HRA. In this case, at what amount would the pf be paid at? (min wages as per the state government for this employee is approximately 12000)
From India, Mumbai
From India, Mumbai
It is not the minimum wages but the total salary that will qualify for PF. Normally for an employee whose salary is just Rs 17000, HRA is not expected to be a compensatory allowance. But so long as no inspection takes place you can pay PF on the basic pay that you have fixed, ie, 9350. But it may be challenged by the EPFO asking to show whether HRA is paid to all employees or is it paid to those who reside in rented/ leased houses only, and if it is paid to all employees including to those who live in their own houses or houses in the name of spouses or if the spouses are also in receipt of HRA, the component of HRA will be included in basic wages.
From India, Kannur
From India, Kannur
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Employee Appraisal Form new.doc