Our company has a policy defined for retirement increment at fixed percentage for white collar employees. This amount is provided to the employees at the time of retirement and hence the last drawn pay slip will not reflect this amount. However, the increment amount is considered for calculation of Gratuity settlement as well as leave encashment. Since the increment is not forming part of the pay slip, PF is not deducted on such retirement increment.
As per the Gratuity Act, the last drawn basic pay would be the basis of settlement for calculating the amount for the completed years of service. Under such circumstances, can we say that the retirement increment added to the basic is last drawn wage and if so, Can PF authorities not question the exclusion of the same in the pay slip and demand to remit PF on such increment.
Can last drawn wage be different for PF and for other long term benefit calculation such as Gratuity, Leave encashment etc?
Kindly clarify as Company feels that the retirement increment is only internal policy and there is no need for inclusion in the last drawn pay slip and deduction of PF on the same.
As per the Gratuity Act, the last drawn basic pay would be the basis of settlement for calculating the amount for the completed years of service. Under such circumstances, can we say that the retirement increment added to the basic is last drawn wage and if so, Can PF authorities not question the exclusion of the same in the pay slip and demand to remit PF on such increment.
Can last drawn wage be different for PF and for other long term benefit calculation such as Gratuity, Leave encashment etc?
Kindly clarify as Company feels that the retirement increment is only internal policy and there is no need for inclusion in the last drawn pay slip and deduction of PF on the same.