PF (Provident Fund) on Special Allowances

The Supreme Court has held that special allowances paid by an employer to its employees have to be included in “basic wage” for deduction towards provident fund. Now All Allowances (Not HRA) will be part of PF wages.


However If  Basic Wages and other allowances collectively are more than 15,000/- per month than the employer has an option to limit wages for provident fund contribution to INR 15,000/- per month

This video about to how to calculation of PF on allowances and what amount come to as extra cost on employer side and net pay reduce for employee.

Regards – Team Payroll Pedia