Dear Amit,
It is advised to have a Minimum wages (Basic+DA) Rs 6500/- for PF calculation.
As per the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 , called the PF Act, the statute which governs Provident Fund (PF) contribution, the PF contribution should be calculated as 12%** of the basic wages plus DA plus cash value of food concession plus retaining allowance, if any, subject to a maximum of Rs.6500/- per month. In case an employee earns more than Rs 6500, they can opt for a higher PF deduction (greater than 12% of Rs 6500) at the joint request of the employee and the employer.
In addition, the PF department contends that the salary for the purpose of PF calculation cannot be lesser than the minimum wages as mandated by the Minimum Wages Act.
Thanks
Srinivasan
Resolve Business Services
It is advised to have a Minimum wages (Basic+DA) Rs 6500/- for PF calculation.
As per the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 , called the PF Act, the statute which governs Provident Fund (PF) contribution, the PF contribution should be calculated as 12%** of the basic wages plus DA plus cash value of food concession plus retaining allowance, if any, subject to a maximum of Rs.6500/- per month. In case an employee earns more than Rs 6500, they can opt for a higher PF deduction (greater than 12% of Rs 6500) at the joint request of the employee and the employer.
In addition, the PF department contends that the salary for the purpose of PF calculation cannot be lesser than the minimum wages as mandated by the Minimum Wages Act.
Thanks
Srinivasan
Resolve Business Services