Hi John,
The model of Rs.5 L p.m. is anyhow outside the purview of compulsory deduction of EPF act being > Rs.15k salary. And again 12% itself cannot be part of earnings being a deduction towards EPF. In order to itemize the components such a high income this has been deliberately accounted in 'earnings' , therefore 10 or 12% doesn't make difference as it's voluntary variables. Employer is free to have their own quantum & different heads of components such as Refresher allow, incentives, festival gifts, business devt. allw., sumptous allw, chauffeur/chowkidhar allw, Lawn & furniture/Quarters allw. and so on.