Clarity needed on increased PF contribution as per new wage code

Hi friends,
I am seeing lot of articles these days saying employees take-home salary will be reduced once the new Wage code is implemented, because the PF contributions will increase - considering Basic will be capped at 50% of the Gross. so on & so forth.

I am not able to understand this logic, because there is a ceiling of Rs. 15000 for PF calculation and even if the Basic increases due to new wage code - PF contribution may be capped at the ceiling limit f Rs. 15000 only.
Then how will the PF contribution increase. Can you throw some light on this.

Best Regards
Kartik

Dear Kartik,

Where the organizations are restricting themselves PF contribution up to 15,000/- , there is no problem. But there are organizations who are paying on actual Basic & DA which is more than 15,000/- statutory limit, for those organizations it will be extra cost due to increase of Basic and DA (50% of total wages after implementation of labor codes ).

Thanks & regards,

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
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