Hello,
So as known in Wage code, base salary should be 50% of the total compensation, is it for all or it can go higher as well?
Can PF be at Rs1800 p.m?
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Hi Manasa,
The rule applies for all employees without any exception. Secondly, the prescribed rate of 50% of Total Compensation must be earmarked as ‘Basic Pay’. Though there is no restriction on increasing the prescribed percentage, be mindful it will impact related liabilities like Employer PF contributions, Gratuity and Leave encashment. So, it is safe to keep it at 50% only.
And yes, Employer PF contribution can be limited to Rs.1800/- pm if that is the existing practice.
Regards, Vinod Gulvady.
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Hi Manasa,
You can read A Simple Guide to the Code on Wages, 2019 (greythr.com) which will be of help to understand the wage - remuneration computation.
Soon, we will add the FAQs to it; stay tuned with us.
Regards,
Bhuvana Anand
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If PF is being paid on a salary over and above Rs. 15,000 per month as of now, then I do not think there will be any need to change it.
If not, then we need to check whether the basic salary is less than 50% of total salary paid in that particular month.
Hello,
So as known in Wage code, base salary should be 50% of the total compensation, is it for all or it can go higher as well?
Can PF be at Rs1800 p.m?
Visit Topic or reply to this email to respond.
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Yes, As of now PF can be at 1800. Unless a new law is enacted.
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