Understanding PF Basic Wage: What the Recent SC Judgment Means for HR Compliance

Dear All,

I have been receiving numerous queries from HR friends regarding the definition of basic wage and its impacts. I have prepared a brief note on PF Basic Wage as per the recent SC Judgment. I hope that it proves to be useful for everyone. Thank you, and have a good day!

Please do not hesitate to contact me for any clarifications regarding compliance at compliance@bayballshr.com.

Warm Regards,

BayballsHR Services Private Limited - Chennai

Web: https://www.bayballshr.com

Dear Sir/Madam,

Thank you for your explanation. Could you please discuss the rationale behind considering the HRA as 30% of total wages? Is there any law or provision regarding this?

Thank you.

Thank you for explaining the included and excluded allowances. Could you please clarify if our employer is contributing to the PF on the entire basic salary, whether it is 15,000/- or more? For employees with a basic salary exceeding 55,000/-, our employer contributes to the PF based on the actual basic salary.

In the scenario mentioned above, should we only cover employees with a basic salary below 15,000/-, or should we consider all included allowances for PF calculation for all employees?

Thank you & Regards,
Shailza