Hi, I am HR for XXXXX PVT Ltd Company located in Hyderabad. We are working for a Canadian client providing architectural drafting services, with nearly 50 employees.
My question is, do we deduct the employee's share and the employer's share from the employee's salary (for EPF and ESIC)? When an employee joins my company, I inform them that both shares will be deducted from their salaries. Employees agree to this at that time. However, is it legal for us to do this? Can we proceed in this manner? Please provide suggestions/advice.
From India, Gurgaon
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My question is, do we deduct the employee's share and the employer's share from the employee's salary (for EPF and ESIC)? When an employee joins my company, I inform them that both shares will be deducted from their salaries. Employees agree to this at that time. However, is it legal for us to do this? Can we proceed in this manner? Please provide suggestions/advice.
From India, Gurgaon
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Hi We should not deduct it into the gross salary but you can consider that as CTC to the employee
From India, Bangalore
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727From India, Bangalore
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Hi,
Employer share is included in the total cost to the company(CTC) and Employee share will be deducted from his gross. And only employee share deduction will be reflecting in the pay slip.
It is illegal to deduct employer contribution from employee's gross salary.
I would be happy to help you to streamline your payroll and statutory compliance process at your organization.
We help companies like yours manage their entire payroll function and handle statutory compliance. We have office in Hyderabad. Currently we are serving nearly 200 companies in SME segment and processing 80,000 records per month.
We offer the following features in our application called " myPayroll" - A web portal where
1) Employees can view their pay slip, provide online Investment declaration and submission of actual proofs, manage their leaves, file their ITR etc...
2) Employer can download various reports like Salary register / Variance report / Summary – PT,PF,TDS,ESIC,LWF / Tax register / Financial JV / Manpower reconciliation / Net Pay Reconciliation / Bank file – Multi-formats / Reimbursement balances / Location/cost center wise payroll summaries / YTD pay-slips.
Please write to me at
or feel free to reach me on 9535423855/9739802627
From India, Vellore
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Employer share is included in the total cost to the company(CTC) and Employee share will be deducted from his gross. And only employee share deduction will be reflecting in the pay slip.
It is illegal to deduct employer contribution from employee's gross salary.
I would be happy to help you to streamline your payroll and statutory compliance process at your organization.
We help companies like yours manage their entire payroll function and handle statutory compliance. We have office in Hyderabad. Currently we are serving nearly 200 companies in SME segment and processing 80,000 records per month.
We offer the following features in our application called " myPayroll" - A web portal where
1) Employees can view their pay slip, provide online Investment declaration and submission of actual proofs, manage their leaves, file their ITR etc...
2) Employer can download various reports like Salary register / Variance report / Summary – PT,PF,TDS,ESIC,LWF / Tax register / Financial JV / Manpower reconciliation / Net Pay Reconciliation / Bank file – Multi-formats / Reimbursement balances / Location/cost center wise payroll summaries / YTD pay-slips.
Please write to me at
From India, Vellore
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As Jeevaratnam said, both employee and employer contributions can be part of CTC but cannot be part of GROSS. There will be 2 parts in CTC structure: gross (part A) and other benefits (part B). All the employer contributions and retirement benefits can be part of Part B. In case you have already informed employees that both will be deducted from CTC, it should be okay from the employee's side. However, you need to be careful in devising this into gross and benefits to be compliant with statutory regulations.
If you need help in streamlining the salary structure or ensuring statutory compliance, please reach out to me at hema@jedhru.com.
From United States, Ogden
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If you need help in streamlining the salary structure or ensuring statutory compliance, please reach out to me at hema@jedhru.com.
From United States, Ogden
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Dear Bchrsnag,
Our esteemed members have given you the correct answer and also explained the underlying issues. However, I am surprised, how has your company been committing this for such a long time? Are you in HR? Or are you working in Operations (Line functions)?
In fact, the words "Employee's Share" and "Employer's Share" should have been very clear even to a barely literate person. It seems the company has been indulging in such unethical and illegal practices willfully.
From India, Delhi
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Our esteemed members have given you the correct answer and also explained the underlying issues. However, I am surprised, how has your company been committing this for such a long time? Are you in HR? Or are you working in Operations (Line functions)?
In fact, the words "Employee's Share" and "Employer's Share" should have been very clear even to a barely literate person. It seems the company has been indulging in such unethical and illegal practices willfully.
From India, Delhi
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Hi Bchrsnag,
EPF & ESI are to be extended to employees as per their respective Acts as a welfare measure. It is a statutory obligation for every company and HR manager to ensure compliance. There is no problem in paying Factory License Fee, Consent Fee, Income Tax, Service Tax, etc. The company only wishes to try to reduce expenses related to PF & ESI, which could create problems for HR managers. HR managers cannot agree to such malpractice solely to create problems. As rightly pointed out by Shri Rajkumar, the words "Employee's Share" and "Employer's Share" should have been clear even to a barely literate person.
It seems the company has been deliberately engaging in such unethical and illegal practices. It is the company's duty and liability to pay its contribution and to demonstrate to inspecting authorities (recover employees' portion from their salary). If the company deducts its portion from employees' salaries, it is against the law and illegal, inviting more trouble for HR managers. HR managers cannot support such malpractice and should present the case to management to avoid violations and future troubles which HR managers will have to face and resolve.
c.neyimkhan@gmail. HR Consultant. 1.16
From India, Mumbai
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EPF & ESI are to be extended to employees as per their respective Acts as a welfare measure. It is a statutory obligation for every company and HR manager to ensure compliance. There is no problem in paying Factory License Fee, Consent Fee, Income Tax, Service Tax, etc. The company only wishes to try to reduce expenses related to PF & ESI, which could create problems for HR managers. HR managers cannot agree to such malpractice solely to create problems. As rightly pointed out by Shri Rajkumar, the words "Employee's Share" and "Employer's Share" should have been clear even to a barely literate person.
It seems the company has been deliberately engaging in such unethical and illegal practices. It is the company's duty and liability to pay its contribution and to demonstrate to inspecting authorities (recover employees' portion from their salary). If the company deducts its portion from employees' salaries, it is against the law and illegal, inviting more trouble for HR managers. HR managers cannot support such malpractice and should present the case to management to avoid violations and future troubles which HR managers will have to face and resolve.
c.neyimkhan@gmail. HR Consultant. 1.16
From India, Mumbai
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Subject: Query on PF Contribution Deductions in CTC Cases
Shri Madanagopalaswamy,
Kindly attach a copy of PF Dept's clarification regarding the deduction of both shares of PF contributions from the employee in CTC cases for our information and reference.
Thanks and Regards,
c.neyimkhan@gmail.com
11.1.16
From India, Mumbai
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Shri Madanagopalaswamy,
Kindly attach a copy of PF Dept's clarification regarding the deduction of both shares of PF contributions from the employee in CTC cases for our information and reference.
Thanks and Regards,
c.neyimkhan@gmail.com
11.1.16
From India, Mumbai
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