Will you please explain me whether is it mandatory that gross minimum wages should be taken for PF Contribution or is it ok that contribution of basic wages of the gross minimum wages to be taken
From India, Madras
From India, Madras
Dear Member,
The EPF contribution should be deducted on the "Basic wages" as per the definition of the act, Please note that it includes certain allowances also but excludes HRA and Washing allowance subject to the max. ceiling amout of Rs.6,500/-. There is no condition or % fixed in the spliting of wages under various heads, its all depends on the company policy. However, the amount of HRA should be reasonable according to the place of living.
From India, Madras
68The EPF contribution should be deducted on the "Basic wages" as per the definition of the act, Please note that it includes certain allowances also but excludes HRA and Washing allowance subject to the max. ceiling amout of Rs.6,500/-. There is no condition or % fixed in the spliting of wages under various heads, its all depends on the company policy. However, the amount of HRA should be reasonable according to the place of living.
From India, Madras
Hello ajit
the is recent judgment in case of g4s security services vs pf dept...g4s were paying pf for basic pay and basic was less than minimum wage. how ever they were paying allowances.so their gross pay was higher than the minimum wages.
the court held that how can an organization pay allowance if they couldn't pay minimum wages. so basic+da should be greater that minimum wages.accordingly you have to pay pf for minimum wages...
the recent judgment by Madhya pradesh high court..the court held that even allowance paid to the "all" employees except hra bonus and commission will attract pf contribution.
warm reg
kathir
From India, Coimbatore
the is recent judgment in case of g4s security services vs pf dept...g4s were paying pf for basic pay and basic was less than minimum wage. how ever they were paying allowances.so their gross pay was higher than the minimum wages.
the court held that how can an organization pay allowance if they couldn't pay minimum wages. so basic+da should be greater that minimum wages.accordingly you have to pay pf for minimum wages...
the recent judgment by Madhya pradesh high court..the court held that even allowance paid to the "all" employees except hra bonus and commission will attract pf contribution.
warm reg
kathir
From India, Coimbatore
Dear Member,
The probelm can be clarified with the following illustration:
Case #1
Minimum Wages of ABC company = Basic =3600 ;VDA/DA = 2400 ; Total = 6,000
EPF Payble (single share) : 6000*.12 = 720
Case #2
The ABC Company Splits minimum wages as follows:
Basic = 2400 ; VDA/DA = 1200 ; HRA = 1000 ; Others = 1,400
EPF contribution is made on ( Basic + VDA) i.e = (2400+1200=3600)
3600*.12 = 432
The Stand of EPF enforcing authority is the EPF contribution is payable only on the total minimum wages subject to the max. ceiling amount of Rs.6500/- (i.e) Rs. 720 (Single Share) Whereas, the ABC company bifurcates the minimum wages to make a short payment to EPFO (i.e Rs. 432.
From India, Madras
The probelm can be clarified with the following illustration:
Case #1
Minimum Wages of ABC company = Basic =3600 ;VDA/DA = 2400 ; Total = 6,000
EPF Payble (single share) : 6000*.12 = 720
Case #2
The ABC Company Splits minimum wages as follows:
Basic = 2400 ; VDA/DA = 1200 ; HRA = 1000 ; Others = 1,400
EPF contribution is made on ( Basic + VDA) i.e = (2400+1200=3600)
3600*.12 = 432
The Stand of EPF enforcing authority is the EPF contribution is payable only on the total minimum wages subject to the max. ceiling amount of Rs.6500/- (i.e) Rs. 720 (Single Share) Whereas, the ABC company bifurcates the minimum wages to make a short payment to EPFO (i.e Rs. 432.
From India, Madras
Hi,
I have found two announcements. One a news paper cutting, other one letter from PF dept. Both have contradicting information. One says you dont need to corelate min wages and Basic + DA and the other says. I would like to seek experts and seniors view on it. The newspaper cutting is more recent one, so from date point of view latest one takes precedence.
Request you to please give a thought and throw some light.
Regards
Preetam Mehta
+91 97409 54666
From India, Bangalore
I have found two announcements. One a news paper cutting, other one letter from PF dept. Both have contradicting information. One says you dont need to corelate min wages and Basic + DA and the other says. I would like to seek experts and seniors view on it. The newspaper cutting is more recent one, so from date point of view latest one takes precedence.
Request you to please give a thought and throw some light.
Regards
Preetam Mehta
+91 97409 54666
From India, Bangalore
Dear Preetam,
I already seen the both the attachment 1st of all no Authority will accept any paper cutting while considering any PF dispute case.
Your Second attachment is the old one. Currently that Circular is kept in abeyance. I am attaching the circular for your reference.
Ratikanta Rath
From India, Durgapur
I already seen the both the attachment 1st of all no Authority will accept any paper cutting while considering any PF dispute case.
Your Second attachment is the old one. Currently that Circular is kept in abeyance. I am attaching the circular for your reference.
Ratikanta Rath
From India, Durgapur
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Splitting of Minimum Wages for the purpose of PF contribution not permissible.doc x
EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf