Navigating EPF Deductions: How Do They Work with Delhi's Minimum Wage?

Hi Seniors, in Delhi, the minimum wage is ₹6656.00. So, how is it possible to deduct EPF because the PF ceiling is ₹6500.00 basic per month? Please guide me as I was working in Haryana state, and Delhi's fundamentals are new to me.

Thanks & Regards,
Shalu

There are two options:

1. You can get the exemption from PF.
2. You can deduct ₹780 from the employee's salary and contribute ₹780 from the employer's side. (Making ₹6,500 as the wage ceiling, i.e., 12% of ₹6,500 is ₹780.)

Regards,

Ok, Sir. If we take an exemption from PF, what are the formalities of returns? I mean, what is the process or the forms for monthly returns, annual returns, etc.? Please guide me on the form numbers that we have to send to the EPFO office.

In my assessment, this is the total gross salary, and PF is deducted only on Basic Salaries. You may fix the basic salary from 50% to 80% of the amount ₹6656/-, and then deduct 12% of that amount.

Regards,
Manish Bali
MSL, (Jindal Group)

Upon checking online, I found that the minimum wage rate in the Delhi region is INR 256.00 per day. Therefore, I believe that the minimum wage constitutes the basic salary.

Yes, Sunil, I agree with Sarveshra. You may be confused between basic and minimum wages. You must prepare the salary break-up as per your company policy.

Regards,
Manish Bali
Manager - HR/IR
Jindal Group of Companies

Minimum wage is a combination of Basic pay + VDA (Rate decided based on the Cost of Living Index for a particular state). The basic wage can be equal to or more than the minimum wage only. Any company policy will follow the minimum wage for basic wage fixation.