How to Calculate PF on Basic Wages Without Overburdening Employees and Employers?

Hi Everyone, I am working in a construction company based in Maharashtra. I want to know about basic wages for the computation of PF. Generally, we are calculating PF on gross salary, which includes Basic + HRA + Medical. As per the new amendment in the wage ceiling of Rs. 15,000/-, many of our employees are not ready for the extra burden. How can I do the working so that the burden will be less both on the employee and employer? How can I work out the salary as per the minimum wage?

Regards,

PF Calculation on Basic + DA

PF is to be computed on basic + DA. You need to correct that. There is, of course, nothing to stop you from contributing extra (subject to the approval of the employee and the total of all deductions not exceeding 50% of the salary). But it is optional. There is a Supreme Court ruling that you can revert to contributing PF on basic + DA and up to the salary ceiling (search the forum) at any time. So, compute the PF on basic + DA subject to a ceiling of 15,000. If the PF amount is similar to what you are already paying, your workers will be happy, or at least the hit will be lower. But keep documentation and explanation ready, as the PF department is likely to ask questions.

Reviewing Your Returns

Further, check how you filed the returns so far. If you stated your basic + allowances in the returns as basic, then you will have a big problem. In that case, you need a good PF consultant to work it out for you and liaise with the department to clear this.

Hi Everyone,

I am quoting the Security Guard rate for the tender as follows: (basic + da) 506/- per day, which totals to (506 x 365/12) = 15390.83/-.

My question is regarding how much EPF rate should be quoted for this, based on whether it is for 30 days or 26 days.