With the recent amendment, employees with a salary of less than 15K are mandated to contribute to PF if the number of employees in the organization is 20 or more.
Calculating the 15K Threshold
My doubt is in calculating 15,000. Should we include HRA and other allowances like conveyance, medical reimbursement, and uniform allowance, or exclude them?
Exclusion of Allowances for PF Contribution
Can we exclude allowances like conveyance, medical reimbursement, uniform allowance, along with HRA for calculating the 12% contribution to the PF fund?
Can anyone clarify, please?
From India, Hyderabad
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Calculating the 15K Threshold
My doubt is in calculating 15,000. Should we include HRA and other allowances like conveyance, medical reimbursement, and uniform allowance, or exclude them?
Exclusion of Allowances for PF Contribution
Can we exclude allowances like conveyance, medical reimbursement, uniform allowance, along with HRA for calculating the 12% contribution to the PF fund?
Can anyone clarify, please?
From India, Hyderabad
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PF Contribution Clarification
PF contribution is payable on Basic, DA, and retaining allowance, if any. HRA and other allowances like conveyance, medical reimbursement, and uniform are not included in the above, i.e., Basic, DA, and retaining allowance. However, if your Basic and DA component is less than the minimum wage rates as declared by the appropriate government for your category of employment, you are liable to pay contributions, including on all allowances.
Regards
From India, Mumbai
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2584PF contribution is payable on Basic, DA, and retaining allowance, if any. HRA and other allowances like conveyance, medical reimbursement, and uniform are not included in the above, i.e., Basic, DA, and retaining allowance. However, if your Basic and DA component is less than the minimum wage rates as declared by the appropriate government for your category of employment, you are liable to pay contributions, including on all allowances.
Regards
From India, Mumbai
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Dear Keshav Sir, Thanks for the info , i will take Basic and DA . May I know which of the below I should take for calculating the cutoff of Rs.15k for de 1)
From India, Hyderabad
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From India, Hyderabad
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Thank you for the information. I will consider Basic and DA for calculating the 12% contribution. Could you please clarify which of the following options I should consider when determining the cutoff of Rs. 15k to decide who falls under the PF net:
1. Basic + DA + HRA + all other allowances = Gross salary
2. Basic + DA + all other allowances (excluding HRA)
3. Basic + DA (only) as used in calculating the PF contribution of 12%
Additionally, could you provide examples of Retaining allowances?
Thank you in anticipation, Sir.
Warm regards,
Ravi
From India, Hyderabad
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1. Basic + DA + HRA + all other allowances = Gross salary
2. Basic + DA + all other allowances (excluding HRA)
3. Basic + DA (only) as used in calculating the PF contribution of 12%
Additionally, could you provide examples of Retaining allowances?
Thank you in anticipation, Sir.
Warm regards,
Ravi
From India, Hyderabad
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You have to consider only Basic + DA for the eligibility of PF membership. However, please note that:
1. If an employee is already a member of PF earlier, he should be covered under PF even if his B+DA is above Rs. 15,000.
2. Once a member of PF, he is a member of PF even if his B+DA is increased and exceeds Rs. 15,000.
Retaining allowance is given to an employee just to retain him in employment when the employer is unable to provide work to him throughout. This system of paying retaining allowance, I heard, is/was in existence in West Bengal.
Regards.
From India, Mumbai
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1. If an employee is already a member of PF earlier, he should be covered under PF even if his B+DA is above Rs. 15,000.
2. Once a member of PF, he is a member of PF even if his B+DA is increased and exceeds Rs. 15,000.
Retaining allowance is given to an employee just to retain him in employment when the employer is unable to provide work to him throughout. This system of paying retaining allowance, I heard, is/was in existence in West Bengal.
Regards.
From India, Mumbai
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Dear Keshav Sir, Thank you very much for a very clear explanation on the subject. This is something that i needed to know for a very long time. Appreciate your efforts sir! Thank you, Ravi
From India, Madras
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From India, Madras
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If the basic salary of an employee is below the minimum wage, then we have to consider Basic + Special allowance for PF calculation. Am I correct? Please clarify the same.
Thanks in advance,
Regards,
Jadughar
From India, Mumbai
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Thanks in advance,
Regards,
Jadughar
From India, Mumbai
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Salary Sheet & PF PT Calculation & Challan.xls