CONSTRUCTION INDUSTRY COST OF PROJECT VS WAGES /GROSS SALARY

Dear Sir,

Need your input regarding to calculate construction cost vs Wages(Gross Salary) cost percentage.

It is required for PF audit.

As auditor saying that out of the total PO, gross wages/Salary should be 25%.

Kindly advise

So far I can remember there is one guide line from Apex court that in absence of bifurcation of invoice, 25% of total invoice should be considered as labor cost in case of Civil Construction. Accordingly, PF & ESIC compliance have to be done.

Auditor is right.

It is always better for any cost, the invoice should be bifurcated in to material cost, labor cost & Supervisory cost (Profit) to avoid any complications.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
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USD HR Solutions – To Strive towards excellence with effort and integrity

You may consult DSR (Delhi Schedule of Rates) which gives the rate of construction for various types of civil construction. This is a standard book and could be quoted if it is serving your purpose.

Dear Sir,

What would be the scenario in below cases.

25 % is Gross Salary or PF wages ?

Gross Salary includes both daily wage worker as well Permanent employee.

Permanent employee PF contribution is restricted to PF Wage ceiling i.e 15000, irrespective of their higher Basic salary.

Apart from the pf member, PF exempted employee also part of project team. Consultants,

Kindly suggest

Reg
Pradeep

25% is the consolidated amount and to be considered as PF gross (wages).Restriction of PF contribution may be up to 15k per month. There may be also excluded employees.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
[Login to view]
USD HR Solutions – To Strive towards excellence with effort and integrity