Navigating PF Deductions: How to Handle Wages Above the Minimum for Contract Workers?

Hi!

I am deducting PF on minimum wages for the contract laborers. But what about the amount which is more and above the minimum wages? Under which head (allowance) can I show it so that PF issues may not be raised in the future by the PF commissioner? Can anyone suggest to me?

If you are deducting the Provident Fund contribution for the minimum wages prescribed, you may not have any problem.

Wages and EPF Contributions

Your draft gives the impression that you are paying wages to contract labor at a higher rate than the minimum wages for their employment but making contributions to the EPFO at the statutory minimum rates of wages only.

If this presumption is true, such a practice is not correct. When the actual wages paid and the prevailing statutory minimum wages are within the applicable limit of Rs. 15K but at variance, the contribution to the EPF should be calculated on the higher amount actually paid only.

However, if the higher wages paid actually comprise more components than the minimum wages and the additional components fall within the ambit of the definition of 'wages' under the Minimum Wages Act, 1948, then the contribution can be on the basis of the basic and D.A. of the actual wages being paid only.