PF Deduction On Which Salary Component & Also Salary Breakup

All,

I would like to clarify if there is any act or guideline to state how the salary split components should be for Manufacturing SME Industry in Tamil Nadu.

My primary query here is: should PF deductions be considered for what salary component; is it only Basic or any other heads also?

Thanks,
Nitya

Dear Nitya,

Wages for the calculation of PF are equal to 12% of Basic + DA + RA (Retention Allowance), up to a maximum of Rs. 6500/-.

Thank you.

Gentlemen,

Components for PF contribution: Basic, DA, all other allowances including monthly incentive except HRA, OT, Bonus, and Allowances of Washing, Food, and TA, subject to the ceiling of Rs. 6500. This is what is informed by the PF Office. Even though the Act stipulates that the contribution is on Basic + DA + Retaining Allowance, PF Officials insist on the above-mentioned components in order to bring the wages up to Rs. 6500.

Usuf Chennai

16 May 2013