Understanding EPF Deductions: What's the Minimum Basic Wage Limit in Himachal Pradesh?

R/S Seniors, please let me update you on the minimum limit of Basic wage deductions in EPF, as the maximum limit is ₹6,500/- in Himachal Pradesh.

Thank you.

Dear Seniors, please let me update you on the minimum limit of basic wage deductions in EPF, as the maximum limit is ₹6500/- in Himachal Pradesh.

EPF & Miscellaneous Act 1952

According to the EPF & Miscellaneous Act 1952, there is no minimum basic wage specified. However, the wages should comply with the provisions of the Minimum Wages Act 1948.

Abbas.P.S

It is correct that as per the EPF & MP Act 1952, there is no minimum basic wage. However, the wages should comply with the provisions of the Minimum Wages Act 1948, i.e., wages for calculating PF contribution should be the minimum wage as per the Minimum Wages Act 1948.

Thanks,
Bhupesh

It is correct that as per the EPF & MP Act 1952, there is no minimum basic. However, the wages should comply with the provisions of the Minimum Wages Act 1948. In other words, wages for calculating PF contributions should be equal to or greater than the minimum wage as per the Minimum Wages Act 1948.

Thanks,
Bhupesh

EPF & MP Act of 1952: Contribution Limits

Under the EPF & MP Act of 1952, there is no minimum limit prescribed. However, the maximum statutory limit is ₹6,500, and beyond it, contributions are optional. The EPF Act is not related to the Minimum Wages Act, as even a piece-rated employee earning less than the minimum wages must contribute in respect of a covered establishment.

Under the EPF Act, contributions are to be deposited based on the amount paid or payable.

Regards,
Chandok - ex RPFC

CONTACT - [Phone Number Removed For Privacy Reasons]

EPF Deduction and Minimum Wages

There is no minimum limit for EPF deduction, but the wages should comply with the provisions of the Minimum Wages Act 1948. The EPF deduction should be based on the minimum wages of that state, which cannot be bifurcated, i.e., minimum wages should be the basic.

Thanks & regards,

Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]

Since there is no minimum PF prescribed under the law, it should not be construed that wages should be near nil with the rest as other allowances! Wages are governed under the Minimum Wages Act and vary from person to person, place to place, and industry to industry. Consider what you pay as Basic & DA. You may limit it to ₹6,500/-.

PS: Even a part-time employee receiving a paltry sum needs to be enrolled as a PF member, regardless of the fact that they have multiple employers and the total exceeds ₹6,500/- from all. You have to discharge your liability to the extent of what you pay.

Clarification on Basic Pay Calculation

Seniors, this information is really useful, but my doubt is still there. According to the Minimum Wages Act (Haryana), minimum wages are ₹3,310, and the basic is 60% of total wages. So, for a ₹4,000 salary, what should be the basic pay - ₹3,310 or ₹2,400, or can I take below ₹2,400 (60% of ₹4,000) or above ₹3,310 up to any extent since there is no fixed limit for basic pay? What is the 60% maximum limit of basic to wages or minimum limit?

Regards,
Vinita Sharma
HR Executive
Velocity Automotives Pvt. Ltd.
Volkswagen Ambala

Dear Vinita,

If the minimum wage is Rs. 3310, the PF deduction should be on Rs. 3310. In case you are asking if the wage is Rs. 4000/-, the EPF should be deducted on Rs. 3310. The basic rate should not be less than the minimum wage described by that state. The consideration of 60% is only applicable when the wages exceed Rs. 10,000.

Hope this will clear all your doubts.

Thanks & Regards,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]

Minimum Basic Wage Fixation

The minimum basic wage to be fixed should align with the minimum wages of the state as described by the state from time to time. For example, in UP:
- US: $4163.98 (monthly) or $160.15 (daily).

The fixed basic should be Rs. 4163, which includes the components of Basic + DA/VDA. This amount should neither be bifurcated nor considered less.

Thanks & Regards,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]

Dear all,

I beg to differ with Mr. Saxena for the following reasons: the Minimum Wages are inclusive of the HR component, whereas Basic wages for PF are not. The basic wages and other allowances, whatever their name may be, should be put together and not be less than the prescribed Minimum Wages, as this would violate the Minimum Wages Act. The EPF Act requires Basic Wages plus DA, retaining Allowance, and Food Concession, if any, for contribution. It excludes HRA, OT, etc. Thus, it is not necessary to fix Minimum Wages as Basic Wages. Basic Wages can certainly be less than the Minimum Wages fixed by the State. Please refer to what Dr. Chandhok has mentioned on this topic.

Sorry, Mr. Saxena, for contradicting you.

Sincerely,
Regards

Dear Satish, Greetings for the day. No need to apologize for contradiction, but it is a healthy symbol to get results. Satish, I mean to say about the minimum wage which is defined by the state from time to time. It is the component of basic + DA/VDA, which can't be bifurcated in the minimum wages. It doesn't include HRA, so go through it carefully.

Thanks & regards,
From,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]

The contexts are different. Minimum wages (MW) include the cost of shelter. Additional Dearness Allowance (DA) or Additional Dearness Allowance (ADA) are also required to be added. However, House Rent Allowance (HRA) is not necessary in addition to MW, DA, and Variable Dearness Allowance (VDA). If the wages and HRA meet the minimum limits, there is no problem. Similarly, Basic Wages are not inclusive of HRA. The MW can be bifurcated as Basic Wages + HRA.

HRA has to be bifurcated for the purpose of Provident Fund (PF) since it has been expressly and specifically excluded for PF calculation.

Thank you.

Understanding Minimum Wage Components

Thanks for responding. First of all, it should be clear what the minimum wage is. It is described by the state government from time to time as per the cost index. Secondly, it is a component of Basic + DA, which can only be split into Basic + DA instead of HRA and other components.

For example, let's take the case in UP where the minimum wage is Rs. 4163.98, which includes Basic (Rs. 2600/-) + VDA (Rs. 1563.98/-). The total is Rs. 4163.98, and the deduction of EPF will be on Rs. 4163.98, not on Rs. 2600/-. Also, the amount Rs. 4163.98/- can only be split into Basic and DA, not into Basic + DA + HRA.

Last but not least, wages and HRA can't meet the minimum limits. These are the views of the consultant who speaks only in favor of employers on how to reduce costs, ignoring the compliance standards of labor laws.

Thanks & Regards,

Sumit Kumar Saxena

[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons].

Basic Wages Compliance

Basic wages are not less than the minimum wages in the state.

Regards,
Sumeet Pal
HR Executive
Monnet Group
Raigarh