Hi Everyone, I am working in a construction company based in Maharashtra. I want to know about basic wages for the computation of PF. Generally, we are calculating PF on gross salary, which includes Basic + HRA + Medical. As per the new amendment in the wage ceiling of Rs. 15,000/-, many of our employees are not ready for the extra burden. How can I do the working so that the burden will be less both on the employee and employer? How can I work out the salary as per the minimum wage?
Regards,
From India, Nagpur
Acknowledge(0)
Amend(0)
Regards,
From India, Nagpur
Acknowledge(0)Amend(0)
PF Calculation on Basic + DA
PF is to be computed on basic + DA. You need to correct that. There is, of course, nothing to stop you from contributing extra (subject to the approval of the employee and the total of all deductions not exceeding 50% of the salary). But it is optional. There is a Supreme Court ruling that you can revert to contributing PF on basic + DA and up to the salary ceiling (search the forum) at any time. So, compute the PF on basic + DA subject to a ceiling of 15,000. If the PF amount is similar to what you are already paying, your workers will be happy, or at least the hit will be lower. But keep documentation and explanation ready, as the PF department is likely to ask questions.
Reviewing Your Returns
Further, check how you filed the returns so far. If you stated your basic + allowances in the returns as basic, then you will have a big problem. In that case, you need a good PF consultant to work it out for you and liaise with the department to clear this.
From India, Mumbai
Acknowledge(0)Amend(0)
2506PF is to be computed on basic + DA. You need to correct that. There is, of course, nothing to stop you from contributing extra (subject to the approval of the employee and the total of all deductions not exceeding 50% of the salary). But it is optional. There is a Supreme Court ruling that you can revert to contributing PF on basic + DA and up to the salary ceiling (search the forum) at any time. So, compute the PF on basic + DA subject to a ceiling of 15,000. If the PF amount is similar to what you are already paying, your workers will be happy, or at least the hit will be lower. But keep documentation and explanation ready, as the PF department is likely to ask questions.
Reviewing Your Returns
Further, check how you filed the returns so far. If you stated your basic + allowances in the returns as basic, then you will have a big problem. In that case, you need a good PF consultant to work it out for you and liaise with the department to clear this.
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Increase In Wage Ceiling And Death Benefits For Dependents For Schemes Under Haryana LWF.pdf