Now many companies using CTC concept. The calculation is as under:
CTC - 12% of basic(Employer part)=Gross Salary
Gross Salary - 12% of basic (Employee part)
Rest 1.61% employer has to pay.
you can convince employee at the time of joining that the employer part of PF is included in their CTC.
For employee this is loss of 12%, but companies are using this concept, and they are not legally wrong.
In my company we have given PF facility to all, it means for those also whose basic is more than 6500/- but 6500/- is cut off basic. it means if A has a basic of 10000/- he will have to pay 780/-(12% of 6500) as employee and the same as employer part.
Please revert for any clarification.
Sanjeev 25th May 2011 From India, Delhi