Can we put the basic salary as the total payment to employees over the PF limit to avoid PF contributions? For example, paying 30000 in total and considering it as a basic salary so that no PF contribution is required. Is there any law or decision contrary to this or any provision dealing with it?
From India, Bengaluru
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From India, Bengaluru
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I am not able to understand why the poster is so intent on avoiding EPF contribution.
EPF Contribution Requirements
Whether consolidated like the example cited in the post or componential, when the monthly wages/salary is Rs. 15,000 or below, EPF contribution has to be calculated on all components other than HRA, and the employee's share is to be deducted and paid to the EPF along with the employer's contribution. When the salary is above Rs. 15,000 per month, the employee, if not already a contributor to the fund, automatically goes out of the coverage of the Act. Here, the gross monthly wages/salary has to be taken as a single package for the purpose of the application of the EPF Act, 1952, and not in terms of components. Therefore, such an exercise is unnecessary, and it would have repercussions in the calculation of the other terminal benefit of statutory gratuity.
From India, Salem
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6108EPF Contribution Requirements
Whether consolidated like the example cited in the post or componential, when the monthly wages/salary is Rs. 15,000 or below, EPF contribution has to be calculated on all components other than HRA, and the employee's share is to be deducted and paid to the EPF along with the employer's contribution. When the salary is above Rs. 15,000 per month, the employee, if not already a contributor to the fund, automatically goes out of the coverage of the Act. Here, the gross monthly wages/salary has to be taken as a single package for the purpose of the application of the EPF Act, 1952, and not in terms of components. Therefore, such an exercise is unnecessary, and it would have repercussions in the calculation of the other terminal benefit of statutory gratuity.
From India, Salem
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EPF-Circular-da ted-23-May-2011 -Splitting-of-M inimum-Wages-fo r-the-Purpose-o f-PF-Contributi on-Not.pdf