PF is calculated on EPF Wages within salary. However, every person is confused about the definition of EPF wages. The below table describes the salary components on which PF should be calculated and which components to avoid.
| To be included | Need not Include |
| Basic | HRA |
| Dearness Allowance | Production Incentive (Need proper matrix for incentive scheme) |
| Conveyance | OT (Over Time) |
| Other Allowance | Night Shift Allowance (Should vary on monthly wise) |
| Special Allowance | Attendance Allowance |
| LTA | Washing Allowance |
| Fixed Allowance in the name of Tele and Food | |
| Allowance) | Canteen Allowance |
| Petrol Reimbursement (without bills) | Petrol Reimbursement (need to have the proof of bills) |
| Retaining Allowance | Bonus and Commission |
| CCA or any other allowance paid as Fixed | Any Allowance paid as variable or only for certain category of employees |
Definition of PF Wages
The current maximum ceiling wage for PF is Rs.15,000/-
