How Does the Supreme Court's PF Ruling Affect Your Salary Breakdown? Let's Discuss!

Supreme Court Ruling on Special Allowances

The Supreme Court announces that all special allowances are to be included as basic wages for the calculation of PF. Can anyone tell me how to break up the salary now? What are the components of the breakup?

Employee Salary Breakdown

One of our employees has a gross salary of 72,000 (basic 38,160, HRA 14,000, Conveyance 9,996, Special Allowance 6,664, and Medical Allowance 3,180). His PF deduction is 4,579. Does it affect his breakup or not?

The second employee's gross salary is 21,330 (basic 11,000, HRA 5,000, Conveyance 3,730, and Medical Allowance 1,600). PF deduction is 1,320. Does it affect his breakup or not?

Please clarify.

Dear Sunil,

Greetings.

Regarding your first query, it is not affected by Supreme Court orders.

Regarding your second query, it will be affected. You need to deduct the PF from special con also, except HRA, Bonus, and Commissions.