Ash Mathew
Recruitments, Training`
Sai Nandan Bohare
Manager Hr At Ksspl
Human Resources
Kalyan Mitra
Exports/risk Management/ Administration/
+5 Others

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Hi All;
I recently joined a big media house and they want me to pay both the contributions of the PF they told me that since they have hired me on CTC they will deduct there share from my salary is it fair. Also they deduct a certain amount from my salary and pay it at the time of diwali as bonus is it okay Please guide me regarding the same.
Thnxs and Regards;

From United States, Fremont
hi devnik, i dnt knw if its the correct practise bt my organisation (which i joined recently) is following the same trend..
From India, Delhi
Dear Dev,
What i understand from your query is that amount of PF & Bonus is shown in your offer letter. Now while giving offer letters few companies shows all cost they are incurring on you in the name CTC (cost to company). So they are going to deposit PF that is a cost they are incurring in you & thats why it is shown in CTC donot understand that employer contribution is deducted from your salary it is paid to PF department by company as it is there contribution but it is also a cost incurred on employee & thats why shown in CTC. same with Bonus it is a cost shown in CTC, companies are not deducting but telling employees that this much figure would be cost per month & finally will be paid in a fixed amount.
above is what I have understood from your statement if I am wrong & company is asking you to pay PF from monthly components in CTC then it is a very sorry state for such companies.

From India, Bhopal
Is it clearly defined in appt letter and agreed by you? if the answer is yes, no dispute. The current trend is to include everything under CTC and most of the companies are resorting to this practice just to inflate the CTC.
From India, Lucknow
Dear All,
What currently the companies are doing is not important and that cannot be the rule of the land but what the statute says is important. As per statute the company must contribute 12% of your basic+ DA as company's contribution and the employee has to contribute the same amountor if the employee wishes can contribute more than 12%. Employee's contribution is always deducted from his salary but Company's contribution cannot be deducted from your salary which is a violation of the Act. However if your basic wages is more than 6500 then you are an excluded employee and u are not covered by the Act.
As for bonus I have never heard of such a ridiculous practice.

From India, Calcutta
As per law it is wrong. BUT to secure your job u have to sacrifice the money. my suggestion is u just pay the both contribution. one thing coming time u r company will also aasku to taken 2 months break before completing 5 years to avoid gratuity.
look what i've found that managed forex

From India, Ludhiana
dear all, the organization in which am working is doing the same and they claim that they have already mentioned in CTC ,the amount which they gonna deduct...
From India, Delhi
Mr.Kalyan, Then you are ignorant on what is happening in the big organisations and their HR policies. Do you know, they are including Gratuity amount also in the CTC?
From India, Lucknow
Hi Dev,
I think what ever your company is following is the common practice, company's calculate the cost per head they are incurring either it might be your PF, ESI bonus / Gratuity(for some companies), they are only concerned and intersted in your CTC and kindly understand that your CTC figure includes your basic salary, H.R.A, T.A+ any other allowances paid to you as per the company norms+ PF contribution(of yours and your company)+ ESI/Medical allowance+any other benifits given.
So if your company is deducting P.F from your CTC then its a right practice and if it is being deducted from your Basic salary then you have every right to approach your HR and clarify the doubts if any.
There are a good no.of articles which are been posted in this cite which can help you to get clarified on what exactly the CTC is!!!!!!!!!!!

From India, Hyderabad
Dear CITE HR friends,

I read some comments on the topic, and it is shocking to see that, we started giving our opinions “What we Feel” but not what law says. It is not important in corporate world or to a Professional HR, “what we feel, but we need to abide by the Law”.

CTC means Cost to The Company which includes, All salary components paid every month (Basic, DA, Med Allowance, Lunch Allowance, Edu Allow, Attire Allow Special Pay ETC…) and monthly expenditures (monitory) incurred to an Employer’s by hiring an employee (All Statutory payments).

If one’s salary is fixed on the basis of “gross” then PF or ESI, OR Gratuity; then contribution will not be deducted by employer from employee’s monthly salary.

If one’s salary is fixed on the basis of “CTC” then PF or ESI, OR Gratuity contribution will be deducted by employer from employee’s monthly salary. It is absolutely right.

We need to check before commenting “Fair/unfair” what was discussed in the interview and mentioned in the offer letter/appointment letter- “Gross or CTC”

Gratuity is also part of CTC, but not the Bonus. Bonus calculation appears only after knowing “Allocable surplus/Profit” of the company in a fin year.

If you keep Gratuity away from CTC, then while you pay Gratuity in a particular year – in annual balance sheet of the company where you can show that “Gratuity amount”? Is it not expenditure to the company?

Apart from that, employer can not deduct bonus from employees’ salary, because it is offence. If such practice is happening in your company, educate the employer, we are hired and paid in HR to ensure labour law is executed and to tell what is right as per labour law to the management.

Bonus is not the part of CTC, and on bonus component no statutory deductions can happen other than Income tax.

If bonus is considered as “part for CTC, it attracts PF and may be ESI”. It is illegal.

Sincere request with all CITEHR friends, If we are not clear on the subject, let us study the subject and let us take this CITEHR as a platform to learn, but not to misguide anyone just to see our name appearing in Citehr.,. Please..


Dr. Sandeep K.

From India, Bangalore

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