Why some companies deduct EPF from basic salary + DA, while others deduct it from all salary components excluding HRA?

loganathan.

Hi Sir, Could someone please clarify why some companies deduct EPF from basic salary + DA, while others deduct it from all salary components excluding HRA? My question is regarding the correct process as per the government gazette notification.

Regards,
P Loganathan - HR

vmlakshminarayanan

Hi

If Basic+DA is equal to or above PF wage ceiling of Rs.15000/- then no need to consider other components of Gross excluding HRA for PF deduction. Hence for such cases only Basic+DA is considered for PF deduction.

Also Employee and Employer on mutual consent can contribute to PF on actual Basic+DA even if the total exceeds Rs.15000/-.

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