Bharat Gera
Principal Hr Consultant
Korgaonkar K A
Loginmiraclelogistics & Management) Pg
Srinath Sai Ram
Hr Manager

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Dear All
Please inform, which components are related to PF Salary, normally Basic and DA are the PF Salary, but some friends are telling some other components are also related to PF Salary i.e Special Allowance and other allowance ..... is it correct or nor. please clarify

Please go through the definition of wages in the EPF & MP Act, it will clear your doubts. Normally special allowance is exposed to PF.
Dear Bharat ji,
I have gone through the Act once again on your above posting but I could not find out a definition of "Wages" in it. There is a definition of "Basic Wages".
Why you say "Normally special allowance is exposed to PF"?
Can you please elaborate on it so that the readers will get something?

Dear Bharatji, Please peruse Judgement wherein it is mentioned that "Special Allowance is not part of basic Wages"

Attached Files
File Type: pdf Special Allowance not part of Basic Wages.pdf (1,020.8 KB, 405 views)

Dear All Please inform , about PF AMENDMENT OF EMPLOYEE SHARE & EMPLOYER SHARE Thanks & Regards pramod Kumar
Dear members, Now the SC judgment on 'Spl.Allowance' is passed on 28.2.2019 all your interpretations on this issue has been settled once and for all. the copy of judgment attached.

Attached Files
File Type: pdf SC.judgment on Special Allow.28.2.2019.pdf (416.2 KB, 95 views)
File Type: pdf SC - PF applicable on special allowances PWC report (1).pdf (320.2 KB, 127 views)

Dear All,
Please find the attached interpretation and impact on PF Contribution post Supreme Courtís verdict by Bench of Justices Arun Mishra and Naveen Sinha.
Essentially, it means that the PF contribution will be on the total amount including all the allowances paid to an employee and not just on the basic salary.
The Supreme Court ruled that 'special allowance' must be included in basic pay for calculation of provident fund (PF) deduction from employees and the company.
A bench of Justices Arun Mishra and Naveen Sinha dismissed appeals filed by many companies questioning the Provident Fund Commissionerís decision to club basic pay with special allowances / other allowances for the purpose of deduction of PF and matching contribution by employers.
Crux and key pointers here are as under -
1. PF ceiling of 15,000/-pm is same ,it has not been revised.
2. If minimum PF contribution as per ceiling is paid i.e 1800/- PM from Both Employee And Employer then there is no need to change.
3. IF contribution is less than 1800 and if Gross is more or up to 15,000/- Rs pm , where Basic is less than 15,000 and remaining amount is bifurcated among different heads then excluding HRA And Statutory Bonus, all other heads to be considered with Basic for framing PF wages up to 15,000/- or on total of all heads if total of all heads is less than 15,000/- then on that entire total amount as arrived to considered as wage for PF to be calculated on.
4. There is no new provision but it is interpretation to the existing section/ Term. Hence date of implication is not expected it is ongoing rule.
5. PF authority may have recourse to the verdict of SC while conducting the inspections and computation of liability up to wage ceiling as defined under the law

Attached Files
File Type: pdf 1 Guidlines On PF to be charged on all other allowances 05032019.pdf (437.8 KB, 156 views)

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