Salary & PF

Dear All,
I recently joined pvt. ltd company in Andhra pradesh. they don;t have salary structure. so i created as below.
Basic - 40 % on gross
HRA - 20% on gross
Transport allow - 10% on gross
edu. - 10% on gross
spl allow - 20% on gross
my question is above structure is right? or else and as on now they are deducting PF 12% on Gross, next month wards i have to change pf deduction on basic then any query will raise from pf office regarding why contribution increased or not.

Hi,
1.HRA, Tran.Allow,& Children Allow take on basic not on gross, in LWP case that should effect to all allowances.
2. Spl.Allowances= ( Gross-(Baisc+Tran.Allow+Edu.Allow)

even i want know the the salary structure. i have joined newly to software company consists 60 staffs around. including how to calculate pf, pt, esic.

Hi,
PF on Basic below 15000*12% ,PT as per your state slab,ESIC Gross below 15000*1.75%.

i am in mumbai i.e is in maharashtra so do reply for PT slab

Hi,
1. Upto 7500 NIL
2. 7500 to 10,000 = 175
3. Above 10,000 = 200 and Month of Feb(300)

Dear Ramesh,
Sorry for the wrong Comment "No value added", it was by mistake.
1. If the company is deducting PF on Gross then as per PF Act you cannot reduce the PF wages (contribution), by bifurcating the same so as the liability is reduced. For New entrants, it is ok.
2. Your structure is ok. But pls make it - Basic+DA = 60%, rest divide in other allowances. (Pls note that the Spl. All. is also considered / defined as DA, hence chargeable under PF. So avoid this component name.) You may include, Conveyance; wash; Attire All; Performance All; Attendance All.etc....

Dear Meena,
There is no such option, except, at the time of joining the Bas+DA is >15000 & employee has given a declaration in Form-11 that he was not a member through his earlier employment.

SPKR
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In your question- you have not mentioned the Nature of Industry/Number of employees (skilled+supervisors+Non-Tech /Tech Managers+Secretarial Staff and its structure+heirachy
Existing pay and allowance structure. In the absence of the said data, your question cannot be answered

Dear All,

There is huge confusion on salary and PF deduction specially in the context of recent amendment of PF wage ceiling from 6500/- to 15000/-. Even PF authority is also confused to advice properly. If we read the act properly then we may find two guide line - one definition of Basic wage(sec 2(b) )and another contribution -sec-6. As per definition of Basic it constitutes all emoluments except - DA, HRA, OT, BONUS, COMMISSION OR ANY OTHER SIMILAR ALLOWANCE ..... and as per contribution it should be on Basic and DA. Therefore, in any pay structure PF authority may add back other allowances other than exemption as mentioned in act to the Basic.

Moreover, there is another act called minimum wages act which guides to pay minimum basic and DA and should not be bifurcated to minimize PF contribution.

Considering all above it is now better to develop a pay structure considering Basic and HRA but basic should not be less than minimum wages of that category. If PF gross (Basic and DA /other allowances as the case may be) below 15000/- per month, it is better to develop pay structure as mentioned above. Above that it is possible to develop few more ITAX rebate related pockets - conveyance, dom medical etc.

Thanks and regards,

S K Bandyopadhyay

USD HR Solutions



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