Dear All,
Does "Other Allowance" in the Salary Statement attract Provident Fund Payments?
Ex:
- Basic
- HRA
- Conveyance
- Uniform
- Medical
- Provident Fund (Employer)
- ESI (Employer)
- Others - ?
Total Gross Salary
Regards,
Sravan
From India, Mumbai
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Does "Other Allowance" in the Salary Statement attract Provident Fund Payments?
Ex:
- Basic
- HRA
- Conveyance
- Uniform
- Medical
- Provident Fund (Employer)
- ESI (Employer)
- Others - ?
Total Gross Salary
Regards,
Sravan
From India, Mumbai
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PF will be deducted on Basic + DA + Retained Allowance. (An allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services)
From India, Hyderabad
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18From India, Hyderabad
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Dear Sravan, PF contribution calculated from BASIC+DA and any arrears of the basic +da. Regards, Prabahar.M
From India, Vellore
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From India, Vellore
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Dear Sravan, PF contribution attarcts for Basic, DA and if any Special Allowance in statement of salary. Regards, Shivnendra K
From India, New Delhi
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From India, New Delhi
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Go for the definition of wages, wherein you could find that basic wages include all emoluments except HRA, retaining allowance, cash for concessional food expenses. They have excluded retaining allowance and cash for concessional food in the meaning of basic wages because it had been separately explained in PF workings. PF would be calculated on basic wages, retaining allowance, and cash for concessional food. Hence, I feel conveyance, medical, and uniform allowances would attract PF.
From India, Velluru
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From India, Velluru
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As per my knowledge, PF from both employee and employer side is calculate on (Basic + DA).
From India, Delhi
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From India, Delhi
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Dear Sravan, here, PF will be loaded only on Basic. There’s no DA mentioned. If you have DA portion you have to add DA also.
From India, Calicut
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From India, Calicut
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Dear Sravan,
The issue - Apart from Basic and DA, whether other allowances are to be considered for PF recovery - is pending in Madras High Court and SC. Based on the final judgment, it can be viewed.
ANBALAGAN.
From India, Tiruchchirappalli
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The issue - Apart from Basic and DA, whether other allowances are to be considered for PF recovery - is pending in Madras High Court and SC. Based on the final judgment, it can be viewed.
ANBALAGAN.
From India, Tiruchchirappalli
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Dear Mr.Kumar Sravan.
What is ‘Basic Wages’ for the purpose of PF
contributions?
The definition of ‘Basic Wages’ has been defined under Section
2(b) of the EPF & MP Act, 1952 as below:
Section 2(b) “basic wages” 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), houserent
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;
From the above definition it is clear that all the emoluments which
are earned by an employee other than those
From India, Madras
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What is ‘Basic Wages’ for the purpose of PF
contributions?
The definition of ‘Basic Wages’ has been defined under Section
2(b) of the EPF & MP Act, 1952 as below:
Section 2(b) “basic wages” 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), houserent
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;
From the above definition it is clear that all the emoluments which
are earned by an employee other than those
From India, Madras
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This is what the problem that all organizations face today with EPFO. EPFO has started issuing notices under Sec 7(A) of EPF & MP Act, 1952, that except HRA, (HRA is totally an excluded allowance from the eyes of EPFO) all allowances form part of Basic Wages.
This means, whatever allowances you pay to employees without any distinction, are construed to be part of Basic Wages. For example, if you pay conveyance allowance to all employees - irrespective of levels and cadres - then this also is considered as basic wages.
On the other hand, if you pay heat and dust allowance to certain employees who are attached to Moulding and casting section (and not to other employees of other departments), then this allowance is excluded.
So, EPFO sees all allowances separately and sees whether any such allowances are paid to all at all times. If so, then all such allowances form part of the Basic wages and issued 7(A) order accordingly. They rely on various Supreme Court orders in various cases.
Therefore, as per EPFO, the allowances paid or payable to all employees (except HRA) form part of basic wages. However, this is being challenged by certain organizations. A couple of cases are pending in the Supreme Court.
V. Balaji
From India, Madras
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This means, whatever allowances you pay to employees without any distinction, are construed to be part of Basic Wages. For example, if you pay conveyance allowance to all employees - irrespective of levels and cadres - then this also is considered as basic wages.
On the other hand, if you pay heat and dust allowance to certain employees who are attached to Moulding and casting section (and not to other employees of other departments), then this allowance is excluded.
So, EPFO sees all allowances separately and sees whether any such allowances are paid to all at all times. If so, then all such allowances form part of the Basic wages and issued 7(A) order accordingly. They rely on various Supreme Court orders in various cases.
Therefore, as per EPFO, the allowances paid or payable to all employees (except HRA) form part of basic wages. However, this is being challenged by certain organizations. A couple of cases are pending in the Supreme Court.
V. Balaji
From India, Madras
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