Can we have a 60% of the Monthly gross as Basic & DA for PF Contributions?

There is always a question in splitting the Provident Fund.

Can we have 60% of the monthly gross as Basic & DA for PF contributions? Let's have an opinion.

Dear Rajan,

You can have any amount as basic and DA which is more than the minimum wages. Please note, the ceiling contribution for PF is Rs. 15,000/-, thus the contribution of the employer above Rs. 15,000/- is solely dependent on the employer and the employee if they wish to do so.

Dear Member,

Wherever the minimum wages are applicable, there should not be a split in Basic and DA in terms of percentile calculation. It is only an assumption that Basic and DA shall be on a percentage basis. No labor legislation recommends having Basic and DA on a percentage basis. At the same time, social security benefits like EPF, gratuity, and bonus computations are based on the "Basic and DA" wages.

If the employer prefers to contribute to EPF more than the cap limit (15,000), then we have to think of percentile-based Basic and DA; otherwise, it becomes meaningless.