Industrial Relations And Labour Laws
Sr. Hr Executive
Srinath Sai Ram
Hr Manager
Hr Manager
Shefali Chauhan
Hr Executive
+2 Others

Thread Started by #Singh Prabhat

Dear All, Skilled worker minimum wage in Delhi is Rs.622 per day , a worker work in a month 13 day and company pay wages is Rs. 900 per day but it divided into some part like ( Basic 550 + HRA 150 + Other Allo 200 ) = 900. PF deduct only 550*12% = 66 is it correct pls guide me
21st July 2017 From India, Delhi
PF is payable only on Basic pay as 'basic wages' under the EPF Act excludes DA,HRA,OT allowance, bonus or any other similar allowances.

22nd July 2017 From India, Bangalore
Dear Prabhat,
As rightly commented by Mohan Kumar, PF will be deducted only on basic. But, Basic should be minimum Basic+DA prescribed under state minimum wages Act.
22nd July 2017
Dear Mr Singh, if you are paying only Minimum Wages as prescribed under Minimum Wages Notification, you have to pay EPF Contribution on MW.But, you are paying more than Minimum Wages.Consequently, you have split Minimum Wages by adding other Components. hence,you are liable to pay EPF Contribution on Basic i.e Rs550/- PER DAY
22nd July 2017 From India, New Delhi
Dear Srinath Sir,
Means if minimum payable wage per day is less than the per day wage , then how will we calculate EPF.
Means in that case EPF will be calculated by taking MW as base or something else pls guide with example
28th July 2017 From India, Pilkhuwa
PF Should be deducted @12% on the actual wages earned by the Employee.Wages means Basic+DA+VDA
28th July 2017 From India, New Delhi
Thanks to all for yr valuable suggestion .
1st September 2017 From India, Delhi
Manoj Kumar is Saying PF deduction = 12% of Basic only
Sainath Sai Ram is saying PF deduction = 12% of Basic+DA+VDA
What the great confusion is being created
2nd September 2017 From India, Jaipur
Singh Prabhat is saying Thank You for valued suggestion
2nd September 2017 From India, Jaipur
Dear HR Professional,
Please note that Employee share of EPF Contribution @12%
EPF Wages means:Basic, DA & VDA.EPF Contribution is payable on EPF Wages only & not on other components.Please update your knowledge in statutory matters before commenting.For your kind information i am qualified & experienced HR Professional with proven track record
2nd September 2017 From India, New Delhi
We have a lot of HR professionals but all HR professionals may not think professionally and interpret law professionally and that is why we the HR Professionals have misused the PF qualifying wages to mean just basic salary and dearness allowances. Certainly, PF is payable on basic wages and dearness allowances (it may be Fixed DA or Variable DA) but what constitutes BASIC Wages is very clearly defined and it is the sum total of the wages earned by an employee as per contract of employment excluding HRA, overtime payment, bonus etc. That means PF is payable on the total emoluments less HRA and Basic wage is not the same basic wage that an employer or the HR Professional like us fix according to our wisdom or custom of the company which will always be very very low since most of the contributions will be on that basic wages.
Now coming back to the discussion, I would say that the EPFO authorities cannot demand that the employer should pay contribution on the entire Delhi Minimum wages just because the notional wages amount if calculated for a monthly basis would be more than Rs 15000. That is Rs 622 for 26 days would be Rs 16172 and no way the EPFO can demand contribution on Rs 16172 though they can demand it on Rs 15000 in respect of an existing member. In respect of a new worker the EPFO cannot even demand any contribution because he can be an excluded employee since his wages at the time of joining the establishment is more than Rs 15000. As such the question of payment of contribution on Rs 900 per day will not arise.
Regarding "other allowances" in the salary break up, I would also say that this is going to be a heavy risk for the employer because any allowance which is paid to all employee in general will be taken as part of statutory wages for all purposes including calculation of gratuity. For deciding the PF qualifying salary also any amount which is required to make the salary equal to Rs 15000 can be taken from "other allowances" as the other component, ie, HRA, is not part of basic wages as per definition of wages under EPF&MP Act
8th September 2017 From India, Kannur
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