Mumbai/New Delhi: Now get ready to feel the pinch in your pocket when you take home a reduced salary. A new circular issued by the Employees Provident Fund Organisation (EPFO) will reduce the take home pay of salaried employees.
According to a report published in The Times of India, the new circular will mean a lower pay because allowances paid to employees will have to be added back to the basic salary and provident fund (PF) contributions computed against this higher value.
The circular dated November 30 states that basic wages will include all allowances which are paid to the employees. Thus, various allowances such as conveyance, educational allowance, medical allowance, etc., will have to be taken into consideration while computing the PF contribution.