Understanding PF Calculation: Should We Include HRA and Allowances for Salaries Over 15,000?

Dear Sir,

If the employee's basic salary is more than 15,000, what are the components we need to consider for PF calculation on the actual gross, not just the 15,000 gross?

Basic: 42,000
HRA: 21,000
Special Allowances: 21,000

PF Calculation Method

Is it possible to calculate PF based only on the basic salary like 42,000 * 12% = 5,040, or should we consider the total of basic, HRA, and Special Allowances like (42,000 + 21,000 + 21,000) * 12% = 10,080?

Which calculation method is correct? Please advise.

Thank you.

Hi, in this case, PF can be deducted on Rs. 15,000 x 12%, which is the minimum, or on the actual basic if both the employee and employer agree.

As per the EPF scheme, you can restrict the EPF wages to Rs. 15,000/-.