Can We Split Delhi's Minimum Wage for PF Calculation? Seeking Guidance and Case References

Dear friend,

Please guide me on this issue. As per the government notification, the minimum wage in Delhi (Central) for skilled workers is Rs. 273 per day. Is it possible to bifurcate this Rs. 273 for PF calculation or not?

For example, Rs. 273 per day. Bifurcation: Basic Rs. 160 and HRA Rs. 113. Please suggest which is correct for PF calculation. Is Basic Rs. 160 correct for PF calculation, or do we have to calculate PF on Rs. 273? If you have any case references, please share them with me.

Regards,
Rahul Raj

Minimum wages number is a combination of Basic+DA. It is already bifurcated, and you need to deposit PF of 12% on Basic+DA.

For employees whose salary is above 6500, it is not mandatory to deposit PF. It is up to the discretion of the employer.

Dear Rahul,

As per the Minimum Wages Act, wage means basic + DA + HRA. Therefore, you can bifurcate the minimum wage into these components. However, ensure that basic + DA is more than 50%, and the remaining amount can be allocated to HRA. You should deduct PF on basic + DA. There is no need to pay 12% on the total amount.

Thank you.