Please guide me on how to show salary break up for 16000/-. ESI/PF is there.
Till now the firm had all employees below 11k salary and showed only (Basic+DA) + (HRA) = (Gross salary).
Example:- 10000+1000=11000/- , is this process correct?
Also, the firm prints this on paper and notes them down with revenue stamp and sign while paying salary instead of maintaining a wage register.
The firm agreed on changing this process but is worried regarding their past style of record keeping.

From India, Bengaluru

Certainly, statutory contributions like ESI and EPF as well as contractual contributions like insurance premium , if any by employer would not form part of the wages/salary payable to the employee though they can find place in the CTC. In the existing scenario as of now, no Law relating to wages other than the Minimum Wages Act,1948 imposes any restriction on the bifurcation of gross monthly salary into components. However, based on the ratio decidendi of the judgment of the Supreme Court in the RPFC-II, West Bengal & Others v Vivekananda Vidyamandir & Ors [2019 LLR 339 S.C] the EPF authorities can question the bifurcation if it reduces or nullifies the contribution amount .

Further, section 2(y) of the Code on Wages,2019 excludes other allowances from the definition of the term wages and therefore imposes the restriction that when the sum total of all other allowances exceed 50% of the gross monthly wages comprising of basic+D.A+Retaining Allowance + other allowances, the excess amount shall be added to the sum of the basic+D.A+R.A.

The COW,2019 is expected to come into enforcement w.e.f 01-04-2021.

Therefore, devise your wage structure accordingly so that the sum of basic and D.A.always remains not less than 50% of the gross monthly wages.

From India, Salem

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