I have a salesman helper working in my shop with a salary of 9000/-. As per government rules, the minimum wage for a helper is 8925 (Basic - 3370/-, VDA - 5555/-). Can I pay PF for 7200/- and show the remaining 1800/- as HRA, or should I pay PF for 9000/-?
Thank you.
From India, Vijayawada
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Thank you.
From India, Vijayawada
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I don't think that the P.F. Authorities would accept the break-up you intend to show just for the sake of reducing the subscription amount when the statutory gross minimum wages fall below Rs. 15,000-00 per month. In my opinion, it is not fair also as the other indirect benefits like bonus, gratuity, etc., too would get eroded.
From India, Salem
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6185From India, Salem
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Dear Pavan-Kumar1, I agree with Umakanthan Sir. Why did the question arise in your mind to split the wages by HRA? This is because you must have read somewhere that, consequent to the interpretation by the Honourable Supreme Court, the components that attract PF exclude HRA. But please note, this is not applicable when you pay wages as per the minimum wage rate. You have to pay PF on the minimum wages.
Earlier, on May 23, 2011, EPFO issued an inter-department clarification indicating that splitting of minimum wages for the purposes of PF contributions is not permissible.
From India, Mumbai
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Earlier, on May 23, 2011, EPFO issued an inter-department clarification indicating that splitting of minimum wages for the purposes of PF contributions is not permissible.
From India, Mumbai
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Splitting of minimum wages for PF in abeyance (1).pdf
Minimum Wages, ESI & PF.pps