Hello,
I understand that HRA and Conveyance allowances are not included in the calculation of employee/employer contributions towards PF. But are they considered when calculating the gross pay for the PF cutoff limit of 15,000?
For example, consider the following salary:
Basic = 8,800/-
DA = 4,400/- (50% of Basic)
HRA = 5,280/- (40% of Basic + DA)
Conveyance Allowance = 1,600/-
Gross Pay = 20,080/-
In this case, Basic + DA amount to 13,200, which is below 15,000. However, the gross salary exceeds 15,000. Is it mandatory to contribute to PF for this employee?
Additionally, is PF applicable to interns/apprentices?
From India, Kottayam
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1I understand that HRA and Conveyance allowances are not included in the calculation of employee/employer contributions towards PF. But are they considered when calculating the gross pay for the PF cutoff limit of 15,000?
For example, consider the following salary:
Basic = 8,800/-
DA = 4,400/- (50% of Basic)
HRA = 5,280/- (40% of Basic + DA)
Conveyance Allowance = 1,600/-
Gross Pay = 20,080/-
In this case, Basic + DA amount to 13,200, which is below 15,000. However, the gross salary exceeds 15,000. Is it mandatory to contribute to PF for this employee?
Additionally, is PF applicable to interns/apprentices?
From India, Kottayam
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Hi John,
PF is calculated on the basis of (Basic + DA) only; gross salary is not related to PF. The company can provide PF even if (Basic + DA) is less than 15000 and its gross is above 15000.
Note: PF criteria
If (Basic + DA) is less than or equal to 15000, then the employee is eligible for both EPF and EPS contribution. If (Basic + DA) is greater than 15000, then the employee is eligible for only EPF, and EPS is not eligible.
From India, Pune
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PF is calculated on the basis of (Basic + DA) only; gross salary is not related to PF. The company can provide PF even if (Basic + DA) is less than 15000 and its gross is above 15000.
Note: PF criteria
If (Basic + DA) is less than or equal to 15000, then the employee is eligible for both EPF and EPS contribution. If (Basic + DA) is greater than 15000, then the employee is eligible for only EPF, and EPS is not eligible.
From India, Pune
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Thank you, Rajeshwari. I just came across the new Supreme Court judgment (and an excellent evaluation of the verdict and its impact by Madhu TK), which does indeed clarify the above query. It appears we have to include Conveyance allowance also.
[Link to the Supreme Court Judgment](https://www.citehr.com/609535-supreme-court-judgement-special-other-allowances.html)
From India, Kottayam
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[Link to the Supreme Court Judgment](https://www.citehr.com/609535-supreme-court-judgement-special-other-allowances.html)
From India, Kottayam
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