THE FINE PRINT

GOVT’S PROPOSAL

‘Wage’ for calculating social security benefits will be defined as a sum of:

■ Basic ■ Dearness ■ Retaining

wage allowance allowance

‘Allowances’ will include:

■ Bonus

■ House rent allowance ■Value of any house accommodation ■ Contribution towards pension or provident fund

■ Travel allowance ■ Retrenchment compensation ■ Overtime allowance

■ Cash value of food

ALLOWANCES SHOULD NOT BE MORE THAN 50% OF THE WAGE Rationale

■ Employers deflate the basic pay to keep the provident fund and other contributions low ■ There are multiple interpretations of wages among employers, employees, inspectors and courts

Impact

■ Take-home salary may take a hit ■ Provident fund contribution and tax liability to go up