Compliance Advisor
794 Points
Posted on 13 April 2015
Dear Sir
1. Wages Means :- only Basic Pay.
As per section 2(b) of EPF & MP Act 1952 “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include
i. the cash value of any food concession;
ii. any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living),
iii.houserent allowance,
iv.overtime allowance,
v.bonus,
vi.commission or
vii.any other similar allowance payable to the employee in respect of his employment or of work done in such employment;
2. An employer is liable to contribute in Employee's PF account @ 12% of Basic wages if employee's basic wages is less than INR 15000.00 pm.
If employee's basic wages is more than INR 15000.00 pm than the contributin will be depend on employee's discration if he wants to contribute to PF account than employer will have to be contribute same contribution fo PF account.
But employers contribution is restricted to 12% of basic wages.
3. Wages for ESI :- Basic wages means
Section 2(22) in The Employees' State Insurance Act, 1948
(22) wages means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes 34 [any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or lay-off and] other additional remuneration, if any, 35 [paid at intervals not exceeding two months], but does not include
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any travelling allowance or the value of any travelling concession;
(c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge;
It means it Includes all elumanates i.e Dearness allowance, HRA, etc
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