Hi, guys. I am very much confused regarding PF calculation, as I know 12% is deducted from basic from the employee. But I have received one salary breakup where 12% is deducted from the basic salary as well in particular calculation. I have also attached a photo for reference. Kindly clear my doubt.
As per my knowledge, the salary breakup should be:
16085 CTC
- 12000 Basic pay
- 1685 Special Allowance
- 458 Gratuity
- 500 Medical
- 1440 PF
- 200 PT
13,485 take home...
But they have done:
16085 CTC
- 12000 Basic pay
- 1685 Special Allowance
- 458 Gratuity
- 500 Medical
- 1440 PF
- 200 PT
Deduction
Gross 13685
- 1440 PF
- 200 PT
12,045 take home...
Why did they deduct PF twice? I thought one is the employee's side, and the other is the employer's side, but usually, the employer's side will not be deducted from the salary breakup. And it will never show in the breakup. I will appreciate if you can reply to this message.
From India, Bengaluru
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As per my knowledge, the salary breakup should be:
16085 CTC
- 12000 Basic pay
- 1685 Special Allowance
- 458 Gratuity
- 500 Medical
- 1440 PF
- 200 PT
13,485 take home...
But they have done:
16085 CTC
- 12000 Basic pay
- 1685 Special Allowance
- 458 Gratuity
- 500 Medical
- 1440 PF
- 200 PT
Deduction
Gross 13685
- 1440 PF
- 200 PT
12,045 take home...
Why did they deduct PF twice? I thought one is the employee's side, and the other is the employer's side, but usually, the employer's side will not be deducted from the salary breakup. And it will never show in the breakup. I will appreciate if you can reply to this message.
From India, Bengaluru
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Dear Member,
The confusion is due to misunderstanding of “Gross Wages” & “CTC” concepts.
The take home salary is difference of “Gross Wages” and “Various Deductions (like PF-ESI-PT etc.)”.
But in CTC other components also added in the Gross Wages which the employer pays for the employee (like Employer PF-ESI Contributions, Annual Bonus, Medical, Gratuity etc.). The employee don’t get those amounts in cash, since the employer pay for the employee hence included in the CTC.
Now come to your above calculation. In your case the Gross Wages is 13685 (12000+1685) from which Rs. 1640 (PF-1440+ PT-200) deducted and you are getting Rs. 12045/-. That is fine.
Your CTC is Gross Wages-13685 + Other Benefits 2398 (458+500+1440) = 16083/-.
The other Salary Slip is just showing Gross Salary, deduction and Take Home salary. Hence PF deducted only one time.
Hope the matter is clear now, fellow members can throw more light on the matter.
From India, Delhi
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238The confusion is due to misunderstanding of “Gross Wages” & “CTC” concepts.
The take home salary is difference of “Gross Wages” and “Various Deductions (like PF-ESI-PT etc.)”.
But in CTC other components also added in the Gross Wages which the employer pays for the employee (like Employer PF-ESI Contributions, Annual Bonus, Medical, Gratuity etc.). The employee don’t get those amounts in cash, since the employer pay for the employee hence included in the CTC.
Now come to your above calculation. In your case the Gross Wages is 13685 (12000+1685) from which Rs. 1640 (PF-1440+ PT-200) deducted and you are getting Rs. 12045/-. That is fine.
Your CTC is Gross Wages-13685 + Other Benefits 2398 (458+500+1440) = 16083/-.
The other Salary Slip is just showing Gross Salary, deduction and Take Home salary. Hence PF deducted only one time.
Hope the matter is clear now, fellow members can throw more light on the matter.
From India, Delhi
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First Payslip will not be accepted by any statutory authority. The second one is perfectly okay. CTC has no legal standing. It is a tool for management to control/understand the cost per employee. Legal payslip has nothing to do with CTC. It should only show the earning side of monthly gross and deduction side - PF, ESI, PTAX, etc.
S K Bandyopadhyay (WB, Howrah)
Email: skb@usdhrs.in
From India, New Delhi
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S K Bandyopadhyay (WB, Howrah)
Email: skb@usdhrs.in
From India, New Delhi
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(Fact Check Failed/Partial)-The user's reply is incorrect. PF deductions are typically split into the employee's contribution and the employer's contribution, not deducted twice from the employee's side. The statutory requirement specifies the components that should be included in a legal payslip.
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls
CiteHR.AI
(Fact Check Failed/Partial)-The user reply is incorrect. The PF deduction should not be counted twice as it consists of both the employee's and employer's contributions. The CTC includes all components like employer's PF contribution, which is not deducted from the salary.