Employer Pf Contribution - Xls Download - CiteHR
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Dear All HRM Professionals,
I have been facing lot of confusion over this issue.
I want to know can the employer's contribution of PF Fund be deducted from the Annual CTC of the employee???????
is it a good practice???
In my company this the practice, now in the Month OF July, every one's salary has been increased wef. 1st Jan 2012, i was supposed to calculate the PF arrears, i have calculated it by referring to the previous year calculation of the same. Similarly i was also asked to deduct the Employer's contribution for PF,
when i have completed all the work as per the previous format, accounts is replying that i should have deducted it from the annual CTC.
As per the previous format, employer's Pf contribution appears in the deduction column.
Pl guide me about the correct and legal process, i m the only person handling HR dept.
Pl help me.

Dear Sir, Thanks for replying. But its been deducting twice, before the calculation of monthly gross salary and also after the calculation of Monthly Gross. Is it legal????? Regards, Pallavi
why you are confused? kindly calculate on the basis of Monthly Salary. If any confusion then reply.
Dear Pallavi,
As per your issue
1. Increment on July effect date on1st Jan 12, you should deduct Employee PF as well as Employer contribution from 1st Jan for PF arrears and should not deduct from CTC. This contribution deducted from both parties.
2. How you can deduct from before the gross
a. Total Earning = Gross
b. Total Deduction
c. Grand Total = Net (take home)
And PF can't deduct from Annual CTC.
if any clarification please call me

Simply speaking, CTC is the amount that you cost your company. That is, it is the amount that the company spends – directly or indirectly – because of employing you.
Thus, it is the money given to you (your in-hand component), plus the money spent because of you.

Dear Sir,
Thank you so much for clarification!
I have done the same. Have deducted Arrears PF Contribution of both Employee and Employer from the arrears wages.
But my account dept. is asking me to deduct the employer contribution from the revised CTC itself.

Hi Pallavi Not to worry. deductions under CTC means total cost to the company. Don’t get confused. Deduct PF on Basic + DA. Calculate even employer contribution of PF so it is CTC.
Dear pallavi,
CTC means cost to the company it included all the amount which is incurred by the company to you. So both the employer and employees contribution can be deducted from the CTC. But the company cannot deduct the employer's contribution from the salary of the employees as per para 31 of the Employees provident fund scheme

CTC does contain the share of PF employer share. it is industry practice. cost to company comprises of components like basic, d a , hra, allowcs, under gross salary and other components LTA, medical reimb etc under annual components also employer incurrs additional expenditure on employee contributions(as a whole in respect of all employees) like pf, esi, gratutiy, Health insurance , life term etc if any.
As these are a part of CTC, whenever the revisions takes place retrospectively you can calculate and arrive employer share pay arrears as per the Act.

Hello Pallavi,
CTC includes both employee and employer PF contribution. From Jan to July you had already deducted PF on regular basis. Now you have to calculate and deduct PF(employee and employer's contribution) from arears only.

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