Special allowance & PF calculation



Does special allowance paid to employee fall under definition of salary for PF? If so, what are the details?

Please advise


Hi Ann,

Yes, there are 3 ways of calculating PF:

  1. 12% on actual basic if basic is more or equal to Rs. 15000/-.
  2. 12% on sealed wage, If basic is less than 15000/- but total salary including allowances is more than 15000/- minus HRA .
  3. 12% on actual total salary including allowances minus HRA if basic and total salary is less than 15000/-.

I hope have answered your query.


Hi @Ann

Agree with @Arpana Special Allowance need not be calculated for PF right now.

But with wage code coming soon - SA needs to be re-looked once states come up with Draft rules.

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