PROVIDENT FUND DEDUCTION - CiteHR
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The Query is this that When Labour Dept Fix minimum wage so we know that PF has to be deducted on that amount. But There are two minimum wage one with out Food,tea & accommodation and one with Food,tea & accommodation which is little less the the amount with out Food,tea & accommodation. Now my question is that if we are providing Food,tea & accommodation to the employees the on which amount PF should be deducted. i.e.
1. with out Food,tea & accommodation.
2. with Food,tea & accommodation.
minimum wage discription
FOR UNSKILLED ----- Without Benefits -- Rs.6000/ month
With Benefits --- Rs.5234/ month
So if iam providing the benefits which amout should i use for PF deduction.
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please be specific about the region/what type of company/ work
If you're unsure if a specific allowance has to be considered for the PF contribution you have to follow supreme courts suggestion on this matter. The Supreme Court has laid down two tests to determine whether a component is included in the definition of basic wages or not. These are test of universality and test of contingency.
Applying the test of universality, if a component is paid universally, necessarily and ordinarily to all employees of a company, the same is included in the definition of basic wages. Applying the test of contingency, if a component is paid subject to uncertain events like overtime payment, the same is excluded from the definition of basic wages.
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