Hi
I am doctor & working in NGO based hospital and medical college.
1. I want to know that when company is counting CTC than the counting include both the side PF, means PF from employee & employer or only one side , means from employee's side.
2. How much percentage PF should be cut ?
3. Is there any criteria or way that PF should not come in CTC.
Dr. Chirag
From India, Ahmadabad
I am doctor & working in NGO based hospital and medical college.
1. I want to know that when company is counting CTC than the counting include both the side PF, means PF from employee & employer or only one side , means from employee's side.
2. How much percentage PF should be cut ?
3. Is there any criteria or way that PF should not come in CTC.
Dr. Chirag
From India, Ahmadabad
Hi Chirag,
Though including PF contribution in CTC is correct, employers take it in a different way and the EPF organisation has come strongly on this.
This faulty concept was introduced by MNCs and soon it became contagious. As per this, a total of 24% (on Basic +DA) will be deducted. (12% on Ee & Er) every month. Sounds different? Let me explain you clearly.
If the PF calculation is worked out from the annual CTC, then monthly gross will be an odd figure. Apart from 24% deduction towards PF, add up Income Tax, and other deductions. Now what is left? A mere payslip with smiling figures on your hands.
Regards,
Chandru
From India, Madras
39Though including PF contribution in CTC is correct, employers take it in a different way and the EPF organisation has come strongly on this.
This faulty concept was introduced by MNCs and soon it became contagious. As per this, a total of 24% (on Basic +DA) will be deducted. (12% on Ee & Er) every month. Sounds different? Let me explain you clearly.
If the PF calculation is worked out from the annual CTC, then monthly gross will be an odd figure. Apart from 24% deduction towards PF, add up Income Tax, and other deductions. Now what is left? A mere payslip with smiling figures on your hands.
Regards,
Chandru
From India, Madras
Dear Doctor,
CTC is the term which in itself means Cost To Company.. Here company will definitely add all fixed components which is a cost for you either direct or indirect.
PF, Gratuity, Bonus, Mediclaim, all these benefits are indirect costs which company bears on behalf of you.. So automatically it is a part of your CTC but not a part of your gross salary.
Dear Mr. Chandru, here nothing been done smartly, earlier it was the concept of Gross salary but now the Company have started to show their actual cost which company is paying for you directly or indirectly.
Regards,
Amit Seth.
From India, Ahmadabad
CTC is the term which in itself means Cost To Company.. Here company will definitely add all fixed components which is a cost for you either direct or indirect.
PF, Gratuity, Bonus, Mediclaim, all these benefits are indirect costs which company bears on behalf of you.. So automatically it is a part of your CTC but not a part of your gross salary.
Dear Mr. Chandru, here nothing been done smartly, earlier it was the concept of Gross salary but now the Company have started to show their actual cost which company is paying for you directly or indirectly.
Regards,
Amit Seth.
From India, Ahmadabad
Dear Amith,
CTC includes Er PF also, no doubt about it dear. You are fully right. I stand to say that you are not supposed to deduct 24% from an employee in monthly paystub stating that EmployerPF is already included in CTC. Hope you got it right.
For your kind information, those were the 'smart' words of PF Commissioner -Chennai (Retd.) zone who spoke to me and not framed by me. The EPFO served notice for the said reason to the CEO of a US based MNC in Chennai where I worked earlier. For obvious reasons, I am withholding the name of that MNC. When the first HR manager occupant does a mistake, it travels a long way till rectified.
In a month, you are supposed to deduct only 12%of PF from employee and not 24 %. It has to be one EePF dedcution and Er PF Contribution in a payslip. This is what the EPFO states strongly.
But what happens now is, in the name of CTC, 24% is deducted from an employee every month to justify that CTC also includes ErPF contribution. If 'lunch is provided' then you are supposed to provide 'drinking water' also. The new justification says that water is already included in butter milk and gravy, then why to contribute separately.
Later, we all received a letter from CEO with a copy of PF Commissioner's notice stating that the error had been rectified and the ErPF amount deducted from us will be refunded and credited in our A/c.
I hope the words have conveyed my thoughts.
Regards,
Chandru
From India, Madras
CTC includes Er PF also, no doubt about it dear. You are fully right. I stand to say that you are not supposed to deduct 24% from an employee in monthly paystub stating that EmployerPF is already included in CTC. Hope you got it right.
For your kind information, those were the 'smart' words of PF Commissioner -Chennai (Retd.) zone who spoke to me and not framed by me. The EPFO served notice for the said reason to the CEO of a US based MNC in Chennai where I worked earlier. For obvious reasons, I am withholding the name of that MNC. When the first HR manager occupant does a mistake, it travels a long way till rectified.
In a month, you are supposed to deduct only 12%of PF from employee and not 24 %. It has to be one EePF dedcution and Er PF Contribution in a payslip. This is what the EPFO states strongly.
But what happens now is, in the name of CTC, 24% is deducted from an employee every month to justify that CTC also includes ErPF contribution. If 'lunch is provided' then you are supposed to provide 'drinking water' also. The new justification says that water is already included in butter milk and gravy, then why to contribute separately.
Later, we all received a letter from CEO with a copy of PF Commissioner's notice stating that the error had been rectified and the ErPF amount deducted from us will be refunded and credited in our A/c.
I hope the words have conveyed my thoughts.
Regards,
Chandru
From India, Madras
hi, ya CTC covers BOTH THE eMPLOYEE 12% Employer 13.61% included in Ctc itself there is no way otherway Ctc will Cover complete cost to company incured for tht person will be included in CT
From India, Pondicherry
From India, Pondicherry
Conceptually one has to understand what CTC means. It means to hire a candidate what is the cost involved? Hence it is THE COMPANY,S CONTRIBUTION 12% TO BE TAKEN AS CTC NOT EMPLOYEE'S SHARE.
Hope matter is clear.
From India, Mumbai
Hope matter is clear.
From India, Mumbai
1. I want to know that when company is counting CTC than the counting include both the side PF, means PF from employee & employer or only one side , means from employee's side.
Answer:- CTC include both side of PF contributions i.e. employer and employee
2. How much percentage PF should be cut ?
Answer :- 12% - employee side and 12% employer side but employer has to pay additional 1.61% as admin charges.
3. Is there any criteria or way that PF should not come in CTC.
Answer: No, there is no available criteria or way to exclude PF from CTC.
Hope this will meet your requirements
Regards,
Pankaj Chandan
From India, New delhi
Answer:- CTC include both side of PF contributions i.e. employer and employee
2. How much percentage PF should be cut ?
Answer :- 12% - employee side and 12% employer side but employer has to pay additional 1.61% as admin charges.
3. Is there any criteria or way that PF should not come in CTC.
Answer: No, there is no available criteria or way to exclude PF from CTC.
Hope this will meet your requirements
Regards,
Pankaj Chandan
From India, New delhi
Doctor,
Cost to the company is only 'Cost being incurred by the Company' on an employee, directly as well as indirectly. Directly is salary, allowances, medical etc, where as, indirect is PF, Gratuity, pension etc. Based on your basic pay and dearness allowance 12% of the said total have to be paid as contribution by the employer every month to the PF A/c. ( Some one said 24%, which is not correct as, employee contribution is notCTC as, the same is paid by the employee from the basic pay and DA ; which has already been counted for CTC. So double counting is not permitted as per Supreme court decision ( Sorry, I am unable to recollect the case now).
MNCs generally count employer PF contribution as a part of CTC.
Gopan
From India, Kochi
Cost to the company is only 'Cost being incurred by the Company' on an employee, directly as well as indirectly. Directly is salary, allowances, medical etc, where as, indirect is PF, Gratuity, pension etc. Based on your basic pay and dearness allowance 12% of the said total have to be paid as contribution by the employer every month to the PF A/c. ( Some one said 24%, which is not correct as, employee contribution is notCTC as, the same is paid by the employee from the basic pay and DA ; which has already been counted for CTC. So double counting is not permitted as per Supreme court decision ( Sorry, I am unable to recollect the case now).
MNCs generally count employer PF contribution as a part of CTC.
Gopan
From India, Kochi
Dear All,
CTC includes all the cost which company incurrs for an employee. CTC includes Gross Salary. So we cannot include PF Employees Contribution again because we deduct 12% (of Basic + DA) from Gross Salary. Same in case of ESIC (if applicable).
But surely the employers contribution of 13.61% (of Basc + DA) has to be included.
As Correctly said by gopan........
Sandeep Kulkarni
From India, Vadodara
CTC includes all the cost which company incurrs for an employee. CTC includes Gross Salary. So we cannot include PF Employees Contribution again because we deduct 12% (of Basic + DA) from Gross Salary. Same in case of ESIC (if applicable).
But surely the employers contribution of 13.61% (of Basc + DA) has to be included.
As Correctly said by gopan........
Sandeep Kulkarni
From India, Vadodara
Dear Friend,
If the total of Basic + DA is more than Rs. 6500/-, then it's the employee's will either to contribute to the PF a/c or not. In case of non contribution, there is no question of employer's contbtn.
Some companies do include both employer's and employee's contribution in CTC though it's not rt. even in the manufacturing co where I was working.
Bina
From India, Delhi
If the total of Basic + DA is more than Rs. 6500/-, then it's the employee's will either to contribute to the PF a/c or not. In case of non contribution, there is no question of employer's contbtn.
Some companies do include both employer's and employee's contribution in CTC though it's not rt. even in the manufacturing co where I was working.
Bina
From India, Delhi
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls