Dear Seniors,
I want to ask a query regarding PF deduction. One of my friends is working in a pharma company. His salary details are as follows:
Basic: 2500
HRA: 1450
Education Allowance: 400
Special Allowance: 3050
Conveyance: 800
CCA: 250
Medical Allowance: 1250
Monthly Total (A): 9700
PF: 300
Monthly Total (B): 10000
Gross Total (A+B): 12000
Daily Allowance: 155
I think he should get 9700/- in hand, but he receives 9400/-. Is it the right deduction or not?
When he asked his RSM, he was told that it's a PF deduction. But PF deduction should be from both sides, i.e., employee and employer, with an equal deduction.
Please suggest.
From India, Jaipur
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5I want to ask a query regarding PF deduction. One of my friends is working in a pharma company. His salary details are as follows:
Basic: 2500
HRA: 1450
Education Allowance: 400
Special Allowance: 3050
Conveyance: 800
CCA: 250
Medical Allowance: 1250
Monthly Total (A): 9700
PF: 300
Monthly Total (B): 10000
Gross Total (A+B): 12000
Daily Allowance: 155
I think he should get 9700/- in hand, but he receives 9400/-. Is it the right deduction or not?
When he asked his RSM, he was told that it's a PF deduction. But PF deduction should be from both sides, i.e., employee and employer, with an equal deduction.
Please suggest.
From India, Jaipur
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It is totaly wrong and elighal a company can not deducat both contribution form employees salary
From India, New Delhi
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From India, New Delhi
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Dear Rani,
If the salary is mentioned as CTC, the employer PF amount only will be given in the offer letter. Employee PF amount will not be shown, and it will be deducted from the salary. So, it is logical only. CTC means the cost to the company, which is given by the company; employee deductions are not to be given. There will also be PT.
Regards,
Swarna
From India, Hyderabad
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If the salary is mentioned as CTC, the employer PF amount only will be given in the offer letter. Employee PF amount will not be shown, and it will be deducted from the salary. So, it is logical only. CTC means the cost to the company, which is given by the company; employee deductions are not to be given. There will also be PT.
Regards,
Swarna
From India, Hyderabad
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Dear Rani,
As Ms. Swarna advised, this is logical only. When we calculate CTC, the co-contribution would be considered. In some cases, if the company has superannuation benefits, they would also be considered. Moreover, PF is a savings for your friend. Whenever he resigns, he can withdraw the amount or transfer it.
Regards,
Raghav
From India, Bangalore
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As Ms. Swarna advised, this is logical only. When we calculate CTC, the co-contribution would be considered. In some cases, if the company has superannuation benefits, they would also be considered. Moreover, PF is a savings for your friend. Whenever he resigns, he can withdraw the amount or transfer it.
Regards,
Raghav
From India, Bangalore
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The CTC to the company also includes Rs. 300 contributed by the company towards the company's share of PF. Thus, the total CTC to the company becomes Rs. 10,000.
After deducting Rs. 300 each as employees' and employers' contributions to PF, the net payment of the salary is correctly paid as Rs. 9,400.
TR Chhabria
From India, Gurgaon
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After deducting Rs. 300 each as employees' and employers' contributions to PF, the net payment of the salary is correctly paid as Rs. 9,400.
TR Chhabria
From India, Gurgaon
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Hi Rani,
I don't think there is anything wrong with it. His monthly gross salary is Rs. 9700, and after deducting Rs. 300, they have paid Rs. 9400. In fact, they should have deducted ESI employee contribution of 1.75% of Gross salary. Please check.
The company has shown Rs. 120000 as CTC (it includes Employer PF contribution also).
If you have any further queries, please let me know.
From India, Madras
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I don't think there is anything wrong with it. His monthly gross salary is Rs. 9700, and after deducting Rs. 300, they have paid Rs. 9400. In fact, they should have deducted ESI employee contribution of 1.75% of Gross salary. Please check.
The company has shown Rs. 120000 as CTC (it includes Employer PF contribution also).
If you have any further queries, please let me know.
From India, Madras
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You are saying that PF deduction is another thing & CTC is another thing. I understand about PF deduction. But pls let me explain about CTC.... Thanks Bnadna rani
From India, Jaipur
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From India, Jaipur
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Hi Rani,
I would like to provide further insight in this regard. As mentioned by Shiva, I completely agree that with a Monthly Salary of Rs.10,000, there should be a Mandatory Contribution of ESIC (i.e. 1.75% from the Employee side and 4.75% from the Employer's side) and PF (i.e. 12% from the Employee side and 13.61% from the Employer's Side). This will add up in the Gross Cost to Company. However, if we look at this Salary Structure provided by Rani, the Monthly Gross is Rs.10,000 [i.e. Rs.9700 (In Hand) + Rs.300 (Employee Contribution of PF)] and subsequently the Annual Amount is Rs.1,20,000. So, it is very evident that they have not included any other contribution amount here in this Annual Amount.
Hence, as per the above Salary Structure, the person should receive Rs.9700 as in-hand Salary and other deductions are apart from this Salary. Although the Annual Gross CTC here would be Rs.1,43,400. The break-up of the Salary is given below:
Basic Rs.2500
HRA Rs.1450
Education Allowance Rs.400
Special Allowance Rs.3050
Conveyance Rs.800
CCA Rs.250
Medical Allowance Rs.1250
Deductions:
PF (Employee) - Rs.720
ESIC (Employee) - Rs.170
TOTAL (A) Monthly Salary - Rs.10590
Total In-Hand Salary [A - (PF + ESIC)] - Rs.9700
Employer's Contribution:
PF (Employer) - Rs.720
ESIC (Employer) - Rs.640
TOTAL GROSS ANNUAL CTC - Rs.143400
This is a standard salary structure format. It might differ from Company to Company. I have tried my best to provide correct information. Any suggestions or corrections are most welcomed.
Thanks,
From India, Gurgaon
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I would like to provide further insight in this regard. As mentioned by Shiva, I completely agree that with a Monthly Salary of Rs.10,000, there should be a Mandatory Contribution of ESIC (i.e. 1.75% from the Employee side and 4.75% from the Employer's side) and PF (i.e. 12% from the Employee side and 13.61% from the Employer's Side). This will add up in the Gross Cost to Company. However, if we look at this Salary Structure provided by Rani, the Monthly Gross is Rs.10,000 [i.e. Rs.9700 (In Hand) + Rs.300 (Employee Contribution of PF)] and subsequently the Annual Amount is Rs.1,20,000. So, it is very evident that they have not included any other contribution amount here in this Annual Amount.
Hence, as per the above Salary Structure, the person should receive Rs.9700 as in-hand Salary and other deductions are apart from this Salary. Although the Annual Gross CTC here would be Rs.1,43,400. The break-up of the Salary is given below:
Basic Rs.2500
HRA Rs.1450
Education Allowance Rs.400
Special Allowance Rs.3050
Conveyance Rs.800
CCA Rs.250
Medical Allowance Rs.1250
Deductions:
PF (Employee) - Rs.720
ESIC (Employee) - Rs.170
TOTAL (A) Monthly Salary - Rs.10590
Total In-Hand Salary [A - (PF + ESIC)] - Rs.9700
Employer's Contribution:
PF (Employer) - Rs.720
ESIC (Employer) - Rs.640
TOTAL GROSS ANNUAL CTC - Rs.143400
This is a standard salary structure format. It might differ from Company to Company. I have tried my best to provide correct information. Any suggestions or corrections are most welcomed.
Thanks,
From India, Gurgaon
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Dear Rani,
There is no error in his basic salary, which is Rs. 2500. Therefore, the deducted amount for PF is correct. The PF amount is deducted based on the total of Basic + DA, calculated as follows:
- 12% from the employee's side (2500 * 12/100 = 300)
- 12% from the company's side (2500 * 12/100 = 300)
This means that a total of Rs. 600 will be deposited into his PF account monthly.
Thank you.
From India, Sholapur
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There is no error in his basic salary, which is Rs. 2500. Therefore, the deducted amount for PF is correct. The PF amount is deducted based on the total of Basic + DA, calculated as follows:
- 12% from the employee's side (2500 * 12/100 = 300)
- 12% from the company's side (2500 * 12/100 = 300)
This means that a total of Rs. 600 will be deposited into his PF account monthly.
Thank you.
From India, Sholapur
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