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), house-rent 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;
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Considering the above section, please recommend:
a. Basic + D. A. = Total M.W. (Total M.W.*12% PF Contribution)
b. Basic + D. A. = Total M.W. (Basic*12% PF Contribution)
Which case (a or b) is appropriate to calculate the PF Contribution?
Please suggest.
From India, Surat
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13The 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), house-rent 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;
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Considering the above section, please recommend:
a. Basic + D. A. = Total M.W. (Total M.W.*12% PF Contribution)
b. Basic + D. A. = Total M.W. (Basic*12% PF Contribution)
Which case (a or b) is appropriate to calculate the PF Contribution?
Please suggest.
From India, Surat
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"A" is correct because recently I attended an inspection under PF, and the inspector reviewed all our documentation. However, he charged us based on the minimum wages basic because we paid wages higher than the minimum wage but calculated the basic pay as less than the current basic.
Thank you.
Regards,
From India, Thana
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Thank you.
Regards,
From India, Thana
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PF- on minimum wages-EPF appellate tribunal-Award against Deptt..pdf