Confused About PF Contribution Rules? Seeking Clarity on Basic+DA Calculation

Dear Seniors, please clarify: when I met with the PF commissioner regarding the PF contribution query, he instructed that it should be Basic+DA or 60% of the Fixed Salary, whichever is higher. As per the PF commissioner's instructions, Basic+DA should be 60% of the Fixed Gross Salary, which is correct. If there is any act stating that PF contributions should be 60% of the fixed salary, please provide the relevant information or attach the document.

Regards,
S. Vadivelu

Please find enclosed the EPF tribunal's judgment in this regard, which is self-explanatory. The fourth page is most important in this judgment.

Regards,
Shish Ram Uniyal
Compliance Consultant
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Basic salary should satisfy the Minimum Wages Act. If you are paying a consolidated salary (i.e., without any other allowances), then the EPF payable should be 70% of the total salary or wage paid to the employee, and this total consolidated salary should satisfy the Minimum Wages Act.

If Basic + DA is satisfying the Minimum Wages Act and you are paying other allowances like HRA, Conveyance, etc., you can pay EPF at 12% on Basic + DA.

Regards,
Jagadish V
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