Understanding Dearness Allowance: Is There a Standard Percentage for Non-PF Companies?

What is the percentage for calculating dearness allowance?

Most of the companies I have heard of do not offer PF or ESI, but they allocate a portion of the salary as 610 for DA. I am unsure at what percentage they are deducting. Is there a standard percentage for deducting DA in non-PF companies?

Please clarify my doubt.

Hi Jenny,

As per government norms and the implementation of the 6th Pay Commission, the DA rate now is 24% of Basic and grade pay. DA will increase by 6% every six months. I don't know your company's pay structure, but this is as per government rules. The PF will be deducted at a rate of 12% of Basic + grade pay + DA. From the employee's end, the same will be contributed by the employer, and the total will be remitted to the PF Office.

Hi,

Can you explain how much PF amount is deducted from employees and employers? Is it correct that employees contribute 12% and employers contribute 13.16%? Does the 12% contribution cover only Basic, DA, or other components? How do we classify the salary into Basic, DA, HRA, uniform washing allowance, and other allowances?

We are interested in deducting PF amounts for our staff. What is the procedure for voluntary PF deduction in a hospital setting? I would appreciate it if any seniors could answer my questions.

Regards, Prabhu.P
Email: prabhu.pandy@gmail.com
Phone: 99655 59067
Location: Coimbatore