Understanding Basic Wages: Does It Include D.A. for EPF Calculations?

When the Govt. says basic minimum wages does that mean basic and the D.A. or is it the basic alone. Is EPF claculated on the basic alone or on the Basic and D.A. together.

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When the government specifies basic minimum wages, does that include only the basic amount or both the basic and the D.A.? Is EPF calculated based on the basic amount alone or on the total of Basic and D.A. together?

Dear Sujatharanjit,

Whenever the government talks about minimum wages, it means that Basic + DA and PF are calculated based on Basic Salary + DA.

Regards,
Pankaj Chandan

Dear Mr. Pankaj,

Please do not contradict your own statement in two different threads. Kindly review your response in the thread "I need urgent help...". It is either PF on basic or Basic + DA. Could you please provide clarification?

Regards

Dear Awvik,

It seems that you haven't checked my edited quote. Please check it again, and one piece of advice for you: don't be impatient.

Keep your mind cool.

Regards,

Pankaj Chandan

Dear All,

PF is deducted on basic salary plus DA only. PF deduction does not cover HRA/CCA/Transport allowance/lunch allowance/OT/bonus and any payment of like nature including cash awards. However, leave encashments attract PF deductions.

Dear Kalyan Mitra,

There is no PF deduction on Leave Encashment!

Regards,
Pankaj Chandan

It's true that there is no PF deduction on Leave Encashment. The Supreme Court had passed a judgment in this regard.

I am satisfied with pon 1965's answer. PF is on Basic + DA + Cash value for food (if any) + Retaining allowance (if any). No other item will be included in it.

Dear All,

There are no written guidelines or notifications regarding the Minimum Wages Act, which state that the minimum wage is the basic wage plus Dearness Allowance (DA).

Regards,
Saurabh

Sunita,

Of course, arrears of basic and DA components should be included for PF calculation. No confusion on this.

Dear Sir/Madam,

My basic salary is $4300, DA $2300, and LTA $5400 per annum. The daily allowance is $95 per day, but it is conditional. This depends on the completion of the daily target, which we normally achieve. The daily allowance is calculated for 22 days a month.

Please also reply by email at [myphoenix4u@yahoo.co.in](mailto:myphoenix4u@yahoo.co.in).

Could you please let me know what my PF would be for any given month and the current rate of PF deductions?

Best regards,

Megh S

Dear All,

It is clear that the Minimum Wage means Basic + DA + Cash value for food (if any) + Retaining allowance (if any). PF is to be deducted on Basic + DA. There is no PF Deduction on Leave Encashment as per a recent judgment. There has been a lot of discussion on the same issue on Citelegal.com, and many HR professionals have posted comments.

M Srinivas
Asst Manager - HR
Hyderabad Waste Management Project
Ramky Group of Companies
Hyderabad
98660 05600
srisu2412@rediffmail.com

Dear All,

Perhaps you are not aware that PF deduction on leave encashment was compulsory till two years ago. Now, it has become optional.

Salary means only the salary you are getting. However, when you get D.A with the salary, then both of them are included in the salary. Similarly, for the calculation of PF, salary is taken. But when you get both salary and D.A, then both are considered for the purpose of PF calculation. Have you understood?

Request for Supreme Court or High Court Judgment on EPF Basic Wages

Please provide any judgment of the Supreme Court or High Court on the subject "EPF Basic Wages shall not be less than the minimum wages inclusive of Basic + DA = Minimum Wages."

Regards,
Piyush Jain
[Email Removed For Privacy Reasons]