Is PF calculated on basic salary only or on the full salary?

PF is calculated on "basic wages", which means basic pay plus dearness allowance and retaining allowance, if any. Other allowances such as HRA, conveyance or overtime are generally not included, though the position can differ where an allowance is paid in a way that works as basic wages.

The statutory wage ceiling is Rs 15,000 per month, so contributions are mandatory only on wages up to that limit. An employer and employee may agree to contribute on actual wages above the ceiling. Confirm your salary structure with your CA or payroll advisor.