Dear Seniors,
Can I show Employer PF contribution as part of CTC (as shown below)? I need your expert opinion.
Components:
Basic Pay + DA
House Rent Allowance
Medical Allowance
Conveyance
Special Allowance
Bonus
Employer PF
Total (A)
Deductions:
Professional Tax
Provident Fund (Employee & Employer Contribution)
Total Deduction (B)
Net Take Home before TDS:
Is the above bifurcation legal? Kindly advise.
Regards,
Glenn
From India, Mumbai
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2Can I show Employer PF contribution as part of CTC (as shown below)? I need your expert opinion.
Components:
Basic Pay + DA
House Rent Allowance
Medical Allowance
Conveyance
Special Allowance
Bonus
Employer PF
Total (A)
Deductions:
Professional Tax
Provident Fund (Employee & Employer Contribution)
Total Deduction (B)
Net Take Home before TDS:
Is the above bifurcation legal? Kindly advise.
Regards,
Glenn
From India, Mumbai
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You can also include employer PF into CTC. However, when deducting, you must only deduct the employee's part of the contribution. This means the employer's PF should be added, and the employee's PF has to be deducted. Do not deduct both.
Suresh
From India, Bangalore
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Suresh
From India, Bangalore
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Dear Suresh,
You mean to say in deduction only employee PF has to be mentioned. We at our organization deduct 1665 in total for PF (780 + 885), so in the payslip, we will have to mention only 780/- and not 1665/-.
Kindly advise.
Glenn
From India, Mumbai
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You mean to say in deduction only employee PF has to be mentioned. We at our organization deduct 1665 in total for PF (780 + 885), so in the payslip, we will have to mention only 780/- and not 1665/-.
Kindly advise.
Glenn
From India, Mumbai
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Dear Seniors,
I have attached the payslip that we provide to our employees for a salary of Rs. 28,000/- CTC per month. We deduct PF of Rs. 1,665/- (both employer 885 & employee 780 contribution) and PT of Rs. 200. Therefore, the total deduction we make is Rs. 1,865/-, and the net amount paid to the employee is Rs. 26,135/- (direct debit in the bank).
I would like to know if including employer PF in earnings and deducting employee PF of Rs. 780 from his salary, the total deduction will be 780 + 200 = 980 (28,000 - 980 = 27,020). So, the amount shown in the payslip will be 27,020, but the actual amount deposited in the bank will be Rs. 26,135 (27,020 - 885).
How can we communicate to the employee that the employer contribution is also deducted, explaining the difference between the payslip amount and the actual payment in the bank?
I would appreciate any suggestions or help that I can get on this.
Regards,
Glenn
From India, Mumbai
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I have attached the payslip that we provide to our employees for a salary of Rs. 28,000/- CTC per month. We deduct PF of Rs. 1,665/- (both employer 885 & employee 780 contribution) and PT of Rs. 200. Therefore, the total deduction we make is Rs. 1,865/-, and the net amount paid to the employee is Rs. 26,135/- (direct debit in the bank).
I would like to know if including employer PF in earnings and deducting employee PF of Rs. 780 from his salary, the total deduction will be 780 + 200 = 980 (28,000 - 980 = 27,020). So, the amount shown in the payslip will be 27,020, but the actual amount deposited in the bank will be Rs. 26,135 (27,020 - 885).
How can we communicate to the employee that the employer contribution is also deducted, explaining the difference between the payslip amount and the actual payment in the bank?
I would appreciate any suggestions or help that I can get on this.
Regards,
Glenn
From India, Mumbai
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You have to show the Gross Salary as Earnings, and Deductions will be of the employee only. So the Employer's contribution towards PF will not be shown in Earnings and Deductions of the payslip. Hope this resolves your query.
From India, Ahmadabad
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From India, Ahmadabad
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You can show the employer's contribution into CTC. In CTC, there are three parts:
1) Monthly Earnings
2) Deductions
3) Annual Benefits
CTC = Monthly earnings x 12 + Total Annual Benefits. You can show the Company PF contribution in the Annual Benefits block.
A.P.Kumar
From India, Hyderabad
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1) Monthly Earnings
2) Deductions
3) Annual Benefits
CTC = Monthly earnings x 12 + Total Annual Benefits. You can show the Company PF contribution in the Annual Benefits block.
A.P.Kumar
From India, Hyderabad
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Dear Glen,
It should be something like this. Gross shows all the fixed earnings and deductions are only of employee's. CTC is the total of gross and employers deduction.
This is because CTC is the total that a company contributes for an employee. Employees deduction is from the gross which is for is benefit and employers contribution is over and above gross.
Annual CTC 246000.00
Basic (40% of gross) 7776.64
HRA (40% of basic) 3110.66
Conveyance Allowance 800.00
Medical Reimbursement 1250.00
Special Allowance 6504.30
Gross Salary 19441.60
Less Deductions
PT 200.00
PF (12% from basic) 933.20
ESI (1.75% from gross, if gross < 15000) 0.00
TDS
Net Salary (take-home) 18308.40
Employer’s Contribution
PF (12% from basic) 933.20
PF Admin charges (1.61% on basic) 125.20
ESI (4.75% from gross, if gross < 15000) 0.00
Total Monthly CTC 20500.00
From India, Hyderabad
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It should be something like this. Gross shows all the fixed earnings and deductions are only of employee's. CTC is the total of gross and employers deduction.
This is because CTC is the total that a company contributes for an employee. Employees deduction is from the gross which is for is benefit and employers contribution is over and above gross.
Annual CTC 246000.00
Basic (40% of gross) 7776.64
HRA (40% of basic) 3110.66
Conveyance Allowance 800.00
Medical Reimbursement 1250.00
Special Allowance 6504.30
Gross Salary 19441.60
Less Deductions
PT 200.00
PF (12% from basic) 933.20
ESI (1.75% from gross, if gross < 15000) 0.00
TDS
Net Salary (take-home) 18308.40
Employer’s Contribution
PF (12% from basic) 933.20
PF Admin charges (1.61% on basic) 125.20
ESI (4.75% from gross, if gross < 15000) 0.00
Total Monthly CTC 20500.00
From India, Hyderabad
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Dear Seniors, Thanks all for your help and suggestions, i will try to incorporate these suggestions...Thanks Suresh, Saji, Bhandhavi, A.P.Kumar.... Regards, Glenn
From India, Mumbai
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From India, Mumbai
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you can shoe but unfair to add statuary payments of employer like pf,gratuity in ctc but we are not doing
From India, Hyderabad
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From India, Hyderabad
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