How DA Is Calculated As Per The Varying Consumer Price Index? - CiteHR
Saswatabanerjee
Partner - Risk Management
Pan Singh Dangwal
Joint Manager
+1 Other

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Dear All,
Please update me on Dearance Allowance amount to be paid to employees (Staff Nurses and other staff of a Private Hospital, Kerala). What is its ratio or percentage?
Whether the DA will vary monthly?
How the DA is calculated as per the varying Consumer Price Index.
Please advise.
Thanks,
Naveena

Dear All, please advise whether DA is compulsory or not? Thanks, Naveena
In general, DA is given to employees of the government Co.
private companies prefer to have a fixed salary while DA changes each month.
If you decide to give DA, then the DA rate is declared by the government periodically
You need to apply that.
Another option is to give basic and DA in the ratio of basic and special allowance declared by the state government in the minimum wages notification

Dear Naveena,
As per my knowledge, in Kerala DA is not compulsory part of Minimum Wages Structure. So I would suggest not to show DA in your wages structure. If you include DA, it will attract additional PF contribution for both Employee & Employer Contribution.
As per law the Wages should be paid as per guidelines issued from the State Govt. under the Minimum Wages Act. Since the wages is revised keeping in view the inflation and Consumer Price Index, so you need not to consider it separately.
Hope the matter is cleared now, fellow members can put more light on the matter.

Hi Vaveenaev,
Greetings ...............
To the best of my knowledge, it is the total salary paid which really matters. If your Organaisation is paying Total Salary more then the Minimum Wages specified for the Category, it would be considered as acceptable by any Authority having jurisdiction. DA in this case could be inbuilt/merged with Basic. However, in case in your Organisation "Basic" follows a typical sliding Scale and there are other Allowances paid to Employees as Salary, mind you that the total Salary would be considered for deduction of PF excepting some allowance as HRA or Conveyance Allowance to & fro Office.
Further, the "Total PF Salary" should be => to Basic + DA specified by the Govt.
Regards,

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