PF Calculation on Basic + DA to PF calculation only on basic?

Hi, At present in our company, the PF is calculated on BASIC (50%) + DA (34%) total of 84% on gross.

Now, we would like to change the PF calculation only on basic i.e. 50% and would like to change the pay scale structure.

Please advise me on how to take it forward, in the middle of the year can we change our pay scale structure, or need to wait till the next financial year.

Request you to kindly help to resolve the same.

Regards,

Sreedevi

You cannot reduce the PF qualifying salary (salary on which you contribute PF). But if you have been contributing the PF on an amount above Rs 15000, you can bring it down to Rs 15000. Below this you cannot reduce the contributions.

What Mr. Madhu T K has been posted, I would like to add that you can change your remuneration structure in the mid of the year keeping in mind Mr. Madhu's above advice.

Instead of Basic and DA , you may consider only Basic (If there is no union agreement or other compulsion) and then other allowances to decide the monthly gross without bringing it below the existing level to dissatisfy the employees.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
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You cannot reduce the wages/salaries of employees, for the purpose of computation of PF contribution, once you started a higher wages.

In this connection, please also refer to Section-12 of Employees Provident Fund & Misc.Provisions Act, 1952.

EPF Wages cannot reduce. If for restructure you are going can take written communication with employee without reduction of statutory limit.