Minimum wages and Pf calculation - Can I pay PF for 7200/- and show the remaining 1800/- as HRA or should I pay PF for 9000/-?

pavan-kumar1
I have a salesmen helper working in my shop with salary 9000/-. As per government rule minimum wage for helper is 8925 (Basic - 3370/-, VDA - 5555/-). Can I pay PF for 7200/- and show the remaining 1800/- as HRA or should I pay PF for 9000/-?
umakanthan53
I don't think that the P.F Authorities would accept the break-up you intend to show just for the sake of reducing the subscription amount when the statutory gross minimum wages fall below Rs.15000-00 pm. In my opinion, it is not fair also as the other indirect benefits like bonus, gratuity etc too would get eroded.
Bhartiya Akhil
Dear Pavan-Kumar1,
I agree with Umakanthan Sir.
Why the question arose in your mind to split the wages by HRA?
This is because you must have read somewhere that consequent to the interpretation by H'ble Supreme Court the components which attract PF excludes HRA.
But please note, this is not applicable when you pay wages as per minimum wage rate. You have to pay PF on the minimum wages.
Earlier on May 23, 2011, EPFO has issued an inter-department clarification indicating that splitting of minimum wages for the purposes of PF contributions is not permissible.
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