Understanding PF Deductions and Expense Cuts on Minimum Wage Salaries: How Do You Manage It?

If a worker's minimum wage is $297, then on what amount do we have to deduct PF, or can we split it, like 65% for basic calculation and then calculate the PF on that amount? Also, how should we deduct food and transportation expenses from their salary?

If the worker is a daily wager, then PF at 12% has to be deducted from the monthly wage, and an equal contribution has to be made by the employer subject to a maximum of 12%.

Dear Samir,

Whether the minimum wage rate is on a monthly or daily basis, if it comprises only the two components of basic and dearness allowance or more, the sum total of basic and D.A. has to be considered for the computation of entire EPF contributions. If the expenses incurred towards food and transportation are due to the special nature of the job, you have to pay them additionally as they would not be part of the wages as per Sec. 2 (h) of the MW Act, 1948.