Dear All,
We show 12% of employer's contribution on account of PF as a part of CTC.An Agency from which we outsource candidates are including 13.61% instead of 12% as CTC component.Should pf admin charge and edli charge also be a part of CTC or what we are following ie 12% is the correct one?
From Canada, Yellowknife
We show 12% of employer's contribution on account of PF as a part of CTC.An Agency from which we outsource candidates are including 13.61% instead of 12% as CTC component.Should pf admin charge and edli charge also be a part of CTC or what we are following ie 12% is the correct one?
From Canada, Yellowknife
Dear All, Mr.Raghunath is right CTC must include all the cost to the company for that particular employment. S.Sethupathy
From India, Coimbatore
54From India, Coimbatore
I disagree with your views. CTC is generally denoted on employee point of view. In this case, the employee is not going to get the extra 1.61% but 12% only. The tangible benefits of employees are only included in CTC. Going by your case, CTC should include all the OH & expenses to be incurred on the employee like PC, tea provided in office hrs, space charges, etc, etc which is not prevalent in Industries. I work for a top 5 companies in India and they don't include 13.61% in CTC but only 12%.
Pon
From India, Lucknow
Pon
From India, Lucknow
Dear Pon,
Gross Salary is amount fixed for the employee and CTC is the amount fixed for his employment. The CTC is the cost to be booked in the books of accounts.
Then what about the 4.75% on ESI and 4.81% on basic for gratuity?
You may call it as the employee will get benefit for the entire 6.5% of ESI. But in the case of gratuity, if the employee resigns before 5 years the amount deducted for gratuity will be revert back in books of account.
honestly I don't know about the deductions made for Tea, Electricity, ID Card, etc., But many companies showing expenses for Uniforms and Leave Encashments in their CTC
With Warm Regards,
S.Sethupathy
From India, Coimbatore
Gross Salary is amount fixed for the employee and CTC is the amount fixed for his employment. The CTC is the cost to be booked in the books of accounts.
Then what about the 4.75% on ESI and 4.81% on basic for gratuity?
You may call it as the employee will get benefit for the entire 6.5% of ESI. But in the case of gratuity, if the employee resigns before 5 years the amount deducted for gratuity will be revert back in books of account.
honestly I don't know about the deductions made for Tea, Electricity, ID Card, etc., But many companies showing expenses for Uniforms and Leave Encashments in their CTC
With Warm Regards,
S.Sethupathy
From India, Coimbatore
Dear Sethupathy,
I am not dwelling on the CTC booking in the accounts. I meant the CTC shown in Appt. letter. Yes, gratuity is also a part of CTC. I don't know about ESI as I am out of this ESI component. It is true that some companies show the leave encashments in CTC but it is wrong as very few are encashing the leaves and the majority avail the leaves. To conclude, no uniform system is prevalent on CTC formulation across the companies in India.
Pon
From India, Lucknow
I am not dwelling on the CTC booking in the accounts. I meant the CTC shown in Appt. letter. Yes, gratuity is also a part of CTC. I don't know about ESI as I am out of this ESI component. It is true that some companies show the leave encashments in CTC but it is wrong as very few are encashing the leaves and the majority avail the leaves. To conclude, no uniform system is prevalent on CTC formulation across the companies in India.
Pon
From India, Lucknow
Dear Aparajita
Net pay or Hand Taking Pay is the amount which we get in our hand.
Gross Pay is the amount which is Net Pay + Employee PF + ESI 1.75% + Other authorised deductions which is being reflected in the Pay Sheet.
CTC is Cost to the company, which includes Gross Pay + Employer PF 13.61% + Employer ESI 4.75% + Other Perquisites whatever being spent by the company for the employees.
Hope you can understand the difference between Net Pay, Gross Pay and CTC. But in some company as said by Mr. Ponraj the PF from employer is shown as 12% only instead of 13.61%.
But the correct one is the cost incurred on an employee by the company is known as CTC.
From India, Kumbakonam
Net pay or Hand Taking Pay is the amount which we get in our hand.
Gross Pay is the amount which is Net Pay + Employee PF + ESI 1.75% + Other authorised deductions which is being reflected in the Pay Sheet.
CTC is Cost to the company, which includes Gross Pay + Employer PF 13.61% + Employer ESI 4.75% + Other Perquisites whatever being spent by the company for the employees.
Hope you can understand the difference between Net Pay, Gross Pay and CTC. But in some company as said by Mr. Ponraj the PF from employer is shown as 12% only instead of 13.61%.
But the correct one is the cost incurred on an employee by the company is known as CTC.
From India, Kumbakonam
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PF not applicable on CTC 18.3.2014.pdf
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