How PF works: Different rules for Indian and foreign workers

EPFO clubs most allowances paid to expatriates with basic salary for calculating PF contribution

For foreign nationals working in India, contribution to provident fund (PF) can be tricky. The Employees' Provident Fund Organisation (EPFO) has offered clarifications on many aspects of PF contribution, but there are still a few aspects that are left to interpretation, which can possibly lead to disputes.

One such aspect is the salary that an employer should consider for PF deduction. According to the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (the EPF Act), an employee needs to contribute his share based on the basic wage, dearness allowance, retainership allowance and cash value of food concessions. Employers, therefore, do