If a company pays gross salary more than minimum wage, pay ESI & PF on gross

If a company pays a gross salary higher than the minimum wage, ESI and PF should be calculated on the gross amount. However, there should be no DA component in the salary structure. Is this structure legally compliant?

For example:
Salary Structure
- Basic: 6000
- HRA: 3500
- Others: 500

The basic wage as per the minimum wage is 5600, with no DA component included.

As long as you pay more than the minimum wages and pay ESI & PF on gross wages, no inspection official will question you.

Dear Babu Alexander Sir,

"And pay ESI and PF on gross wages," PF is paid on Basic+DA+VDA.

ESI contributions are always based on Gross wages. Your classification of Basic, DA, and VDA will attract ESI and PF contributions.

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