Dear All,
Good Morning,
I have joined a new company and have reviewed the available appointment letters of the previous employees. The structure outlined in the old employee's appointment letter includes the following components:
- Basic
- HRA
- Conveyance
- Special Allowance
- Emp. PF
- Total
I have a few queries regarding this structure:
1) Is Employee PF included in the gross salary?
2) What is the actual gross salary?
3) Should the Employee PF be deducted or not?
In general, my practice is that the Employer PF and ESIC contributions should be covered by the employer. I would appreciate guidance on the above queries.
Regards,
Prasad Apte
8828844966.
From India, Mumbai
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Good Morning,
I have joined a new company and have reviewed the available appointment letters of the previous employees. The structure outlined in the old employee's appointment letter includes the following components:
- Basic
- HRA
- Conveyance
- Special Allowance
- Emp. PF
- Total
I have a few queries regarding this structure:
1) Is Employee PF included in the gross salary?
2) What is the actual gross salary?
3) Should the Employee PF be deducted or not?
In general, my practice is that the Employer PF and ESIC contributions should be covered by the employer. I would appreciate guidance on the above queries.
Regards,
Prasad Apte
8828844966.
From India, Mumbai
Acknowledge(0)Amend(0)
Employer's contributions to EPF and ESI are not part of the gross salary but can be listed below the gross salary as part of the Cost To Company (CTC). From the gross salary, the employee's share of ESI and EPF shall be deducted to arrive at the net (take-home) salary.
From India, Kannur
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4771From India, Kannur
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PF contribution does not form part of Gross Salary because it is not an earning; it is a deduction made at a given rate from the Gross salary calculated on "Pay" components of Gross salary. However, it is considered in CTC because in some industries, the employer also contributes an equal share of PF as deducted from the employee, whereas in some, PF is contributed by the Employer with no deduction made from the employee. In some cases, part is deducted from the employee, and part is contributed by the Employer.
"Gross Salary" and "Pay" are two different terms. Gross salary includes Basic + Dearness Allowance (D.A.), HRA, and other allowances - if any. Whereas "PAY" includes only Basic pay and D.A.
AK Jain Retired Manager (HR) CPSU
From India, New+Delhi
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"Gross Salary" and "Pay" are two different terms. Gross salary includes Basic + Dearness Allowance (D.A.), HRA, and other allowances - if any. Whereas "PAY" includes only Basic pay and D.A.
AK Jain Retired Manager (HR) CPSU
From India, New+Delhi
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-Your explanation is correct. PF doesn't form part of Gross Salary, it's a deduction. 'Pay' covers only Basic pay and D.A. Keep contributing such valuable insights. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-Your explanation is correct. Employer's contributions to EPF and ESI are part of CTC, not gross salary. Employee's share is deducted from gross to calculate net salary. (1 Acknowledge point)