Percentage of wages component in civil work(with material) - CiteHR
Boss2966
Industrial Relations
KK!HR
Management Consultancy
Natraj@sakthimanagement.com
Head - Outsourcing
Srinath Sai Ram
Hr Manager
Vippon
Service
+1 Other

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I m from EPF office. I have to calculate PF dues on civil work expenses incurred by a municipal corporation. But the expenses includes material and wages. The MC has no bifurcation of expenses of material and labour. How can I calculate the wages/Labour on total civil work expeses and under which rules.
Dear Mr Vippon, you are from EPF Office.How come for municipal Corporation civil work, PF Contribution is payable? before calculating Wages, Please identify the beneficiaries/Employees
The Delhi Schedule of Rates (DSR) offers standard for calculation of civil component costs of many type of standard works. It is published and is available, so you may consider consulting the standard reference book.
Normally 65 to 70% will be the Material Cost, 2 - 5% for Overhead 12 - 15% will be Labour Cost and 10% will be the Profit of the Contractor. This is for with Material work. If the same is without material then it will be 75 to 80% for Workmen wages, 10% for Manpower Supplier and balance 10-15% will be the profit of the contractor.
Dear ShreeNath Sai Ram
The inspection of Municipal Corporation is to be done by EPF officers. As per MC records there are a huge amount of civil work booked. No epf deducted and paid on this amount as the wages component is not known in total amount. The total civil work amount consists material and labour charges. On labour charges epf is payable by the MC. But there is no method to calculate labour charges in civil work. Therefore I need help.
Regards

In ESI case, Madras High Court has held that in the absence of break up figures for the total construction cost, 25 % on the total cost may be considered towards labour charges. Similarly PF may also be considered on the labour charges of 25 % of the total cost of construction.
N Nataraajhan, Sakthi Management Services (Hp : + 91 94835 17402 ; E-mail : )


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File Type: pdf HC Mad - ESIC v Sundaram Clayton 2004.PDF (149.2 KB, 52 views)

Dear Mr Vippon, as informed by Mr Natraj, it is well settled principle that in the absence of Bifurcation of Salary Component, you may take 25% of the Bill as Salary as per various ESI Claims & judgements.But Pertinent question here is that you have to identify the Names of Employees before making observation in your Report.Whether Municipal Corporation is covered under EPF Act independently? whether Civil work was entrusted to Civil Contractor independently covered under EPF?
So far in my career, i have not come across such claim by EPF Authorities.Hence reasonable doubt in my mind that whether your observation will withstand the scrutiny of Law

Is there any new relevant information available regarding wage component in construction work contract.
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