Dear All,
Does the employer contribution to PF form part of CTC?
What I am trying to understand is that can the employer deduct organizations contribution to the PF from the CTC.
Plz give your inputs as to what is being followed in your respective organizations. Specifically for IT, service, BPO industry
Await your responses.

From India, Gurgaon

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Hi, Yes. The Employer Contribution to PF is the part of CTC(Cost to the company). The CTC concept introduced to calculate the cost of each employee to the company. Murali.
From India, Hyderabad
Dear Ms Nidhi,
CTC include all cost or expenses incurred for the employee.
PF contribution, liability towards gratuity, ESI (if applicable) - employer's share , if tax part is born by employer it will be a part of CTC.
But it does not include any incentive or appriciations amount linked with annual performance.

From India, New Delhi
Dear Nidhi,

Employer's pf is includive part of CTC, as well i am disagreed with nn_tiwari's comment.

There is no rule specified for what componant are inclusive or exclusive, its always depend upon compan's culture.

So far perfomance bonus and fixed incentives are also part of CTC.

When as a candidate you resume interview, you always show them CTC structure and facility available from employer.

e.g. Suppose i am with the "X" compnay and they had given me accomodation facility. and in interview "Y" company as a policy if they don't provide accomodation, then they will include such amonunt in salary structure by which offer will be made.

exploring in detail

Suppose X person's salary is 10000,

company accomodation lease povided 5000

X person's new offer from other company will be more than 15000, They have to calculate salary increament on 15000 not on 10000.

As well if you provide them certain fix incentive, like petrol allowance, 1000 per month, it will be a CTC part from employer.

Therefore it depends upon compnay to company and policy to policy;



Hello everyone.
i agree with Virendra, this is how practical offers are being made. an employee may / may not count while working with company, but when he search out for job, he will definately include those fix amount in CTC and expect rise on that amount. and it's appropriate too....
however, i agree with Nidhi also, only thing is that there are various practices being adopted by organizations depending up on their management decisions.
Cheers !!

From India, Vadodara
CTC - Cost to the Company
It includes everything that the employer tends to pay to a particular employee during the course of one year. This includes, employers contribution in PF and ESI. Sometimes, employers agree to pay the TDS...even that is included in CTC. Cost of Furnished House; Car; Magazines etc. These all are included in CTC.
Sanjeev Sharma

From India, Mumbai
Dear Nidhi
There are 2 ways to convey compensation to an employe. Gross Salary & CTC. In Gross salary 1 part of PF from employee side is deducted, Employer adds his own part and deposits.
IN CTC both parts - Employer & Employee are included & both the parts are deducted and deposited.
CTC is more prevelent in IT & related industries more as a matter of administrative convenience. It does not in any case affects employee's financial income.

From India, New Delhi
Dear All,
Thanks a lot for your inputs, it definitely gives me a better understanding of the subject.
Request you to share with me a salary break up as to how we should be presenting the same to the employee. Usually the Salary break up shows only one deduction for PF from the CTC.
Hope to get your help in this as well.
Warm Regards

From India, Gurgaon
Hi Nidhi, CTC means cost to company. So whatever company spends on the employee. I am attaching herewith salary break up which we give to employees. Hope this will help you regards Madhuri
From India, Mumbai

Attached Files (Download Requires Membership)
File Type: xls salary_breakup_for_employee_143.xls (21.5 KB, 6830 views)

Hi All,
I have another question raised seeing this discussion.
Virendra mentioned about the Increments. How are increments calculated? Is it on Gross Salary or CTC?
If some one is getting a fixed allowance ( Legally the Term ALLOWANCE) does the Employee have to submit Bills for the same?
And to Virendra I guess Incentives and Allowances are/Should be categorised under different heads. ( correct me if am wrong).

From India, Hyderabad

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