Greetings All,
I am a frequent visitor of this forum and it left me in awe seeing the spontaneous responses from the eminent HR's for the queries posted.
I have a small query pertaining to the PF deductions. The PF is deducted from the salary which constitutes 12% from the basic pay. and 12% is from employer end. My query is,
1.Is this 12% employer's contribution is included in the employee's CTC or not which is mentioned in the offer letter.
2.Is there any thumb rule that the CTC should not be deducted from the employee's salary(i.e.Employers contribution from employee salary).
3.If it is done so(Deducting employer's PF from employee's salary) then is it legitimate. If not,what is the best possible thing that could be done.
I am Callow about this PF deductions and it would be great if someone advocates me to clear this ambiguity.
Thank You in Advance.
From India, Bangalore
I am a frequent visitor of this forum and it left me in awe seeing the spontaneous responses from the eminent HR's for the queries posted.
I have a small query pertaining to the PF deductions. The PF is deducted from the salary which constitutes 12% from the basic pay. and 12% is from employer end. My query is,
1.Is this 12% employer's contribution is included in the employee's CTC or not which is mentioned in the offer letter.
2.Is there any thumb rule that the CTC should not be deducted from the employee's salary(i.e.Employers contribution from employee salary).
3.If it is done so(Deducting employer's PF from employee's salary) then is it legitimate. If not,what is the best possible thing that could be done.
I am Callow about this PF deductions and it would be great if someone advocates me to clear this ambiguity.
Thank You in Advance.
From India, Bangalore
Dear Mohammed Arif, You may show employer share of EPF in CTC. But it should not be deducted from employees' salary. Abbas.P.S
From India, Bangalore
517From India, Bangalore
Dear Arif,
CTC (Cost to Company) refers to the total amount of expense an employer spends for their employee... hence It includes the employer contributions...
1. CTC includes the Employer contributions which will be mentioned in the Appointment order.
2. As per EPF act, Employer contributions should not be deducted from an employee. but there is no relation between EPF act and CTC...Many companies will fix a consolidated pay and deduct the employer contribution from their employees..
3. Your pay may be fixed as the below
Type - 1
Informing you a salary of Rs.11364/- and not deducting the Pf Employer contribution from employees
Wage 11364
12% Employee 1363.68
12.36% Employer 0
Net 10000
Type -2
Informing you a consolidated pay of Rs.10000/- at hand and deducting the PF Employer and Employer contribution from employees
Wage 13220
12% Employee 1586.4
12.36% Employer 1633.992
Net 10000
Both the Calculations are similar as you get Rs.10000/- at hand every month. It depends on the employer calculation of CTC.
From India, Madurai
CTC (Cost to Company) refers to the total amount of expense an employer spends for their employee... hence It includes the employer contributions...
1. CTC includes the Employer contributions which will be mentioned in the Appointment order.
2. As per EPF act, Employer contributions should not be deducted from an employee. but there is no relation between EPF act and CTC...Many companies will fix a consolidated pay and deduct the employer contribution from their employees..
3. Your pay may be fixed as the below
Type - 1
Informing you a salary of Rs.11364/- and not deducting the Pf Employer contribution from employees
Wage 11364
12% Employee 1363.68
12.36% Employer 0
Net 10000
Type -2
Informing you a consolidated pay of Rs.10000/- at hand and deducting the PF Employer and Employer contribution from employees
Wage 13220
12% Employee 1586.4
12.36% Employer 1633.992
Net 10000
Both the Calculations are similar as you get Rs.10000/- at hand every month. It depends on the employer calculation of CTC.
From India, Madurai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
SALARY with out PF Deduction.xls
PF deduction on leave encashment.doc