Dear Sir,

Is there any minimum wage limit for PF deduction of employee? For example in Himachal Pradesh minimum wages are Rs. 3300/- p.m. Suppose if employer divide this wage into two heads i.e. Basic & HRA i.e. Rs.2000/- & Rs. 1300/- respectively. Then on which amount  employer is liable to deduct the amount, on basic or gross. Please consider this question as important because it is troubling me for quite some time.

Thanks & Regards,

Avinash Kumar Sharma

Dear Avinash PF should be made on Basic+DA only,as u r not mentioned DA here,PF deduction made on Basic only.

and the Basic should not be less than the minimum wages.

PF shold be deducted from Basic and DA , if any. For the purpose of calculation of minimum wages all components should be considered. In the state level , there is House Rent  Allowance Act also. At HP pl see if there is such type of Act or not.

Wage for PF is basic+DA.

PF on minimum wages is to be deducted.

If the minimum wage consists of Basic ,DA etc the pf to be deducted on both components.

If the minimum wage is a single consolidated wage, it is nothin but Baic only. In such cases splitting and making covering pf on part of the wage is not advised.

But in such cases, please pay slightly more than the minimum wage and split it into Basic etc., and pay pf on basic and da.

Dear Avinash,

In H.P. according the minimum wage G.O. the minimum wage includes only the Basic & DA. and as so both are essential for computation of PF dues. Hence in my opinion it is better to to deposit PF on the gross salary as stated.

Dear Sir,

Can u quote or provide the copy of G.O. so that I can further enrich my knowledge.

Thanks & Regards,

Avinash Kumar Sharma

Email- avinash9032@rediffmail.com 

Please specify the nature of industry and the employment strength.

Dear Sir,

The industry is that of Zinc Casting and the employee strength is about 800 half of which are contractual.

Thanks & Regards,

Avinash Kumar Sharma

DEAR MR SHARMA

THERE IS NO CONNECTION BETWEEN THE DEFINITION OF WAGES IN MINIMUM WAGES ACT 1948 AND EPF ACT 1952. PLEASE DO VERIFY BOTH ARE DIFFERENT DIFINITION. THE EPF AUTHORITY HAS NO POWER TO QUESTION OF MINIMUM WAGES. NORMALLY 70 TO 80% SHOULD BE TAKEN INTO ACCOUNT OF EPF DEDUCTION. ONLY HRA IS EXCLUTED UNDER EPF ACT. IT SHOULD NOT BE MORE THAN 20 %. YOUR BIFURCATION IS SOMEWHAT RIGHT. BUT REDUCE THE HRA AND INCREASE CERTAIN LEVER IN  THE BASIC.  LIKE BASIC + DA  OR BASIC  =   RS/-2640/-  RS/-

 BY e. a. murugan

Consultant and Advocate

salem, tamilnadu, 9842763303