Query: Is PF Applicable on Service Charges?
A PF inspector inspected our PF records and raised a query that the service charges you are showing in your balance sheet are a form of TIP and constitute income for employees. Therefore, there is an applicability of PF from both the employer and employee perspectives.
How We Are Handling Service Charges:
1. It is coming from the customer side when they are paying their bill (the amount mentioned in the bill as well).
2. At the month-end, the whole collection is distributed among employees as per their monthly rewards points after deduction of breakages. However, it is not included in the salary slip.
3. We are following a minimum basic salary for PF, i.e., ₹6500. If Basic + DA is more than ₹6500, then PF deduction is on ₹6500; if Basic + DA is less than ₹6500, then PF deduction is on the actual amount.
Please provide your expert advice. PF written cases and judgments will be appreciated.
Regards
A PF inspector inspected our PF records and raised a query that the service charges you are showing in your balance sheet are a form of TIP and constitute income for employees. Therefore, there is an applicability of PF from both the employer and employee perspectives.
How We Are Handling Service Charges:
1. It is coming from the customer side when they are paying their bill (the amount mentioned in the bill as well).
2. At the month-end, the whole collection is distributed among employees as per their monthly rewards points after deduction of breakages. However, it is not included in the salary slip.
3. We are following a minimum basic salary for PF, i.e., ₹6500. If Basic + DA is more than ₹6500, then PF deduction is on ₹6500; if Basic + DA is less than ₹6500, then PF deduction is on the actual amount.
Please provide your expert advice. PF written cases and judgments will be appreciated.
Regards