Dear friends, Pl find attached circular dated 18.3.2014 issued by EPFO on the subject. Thanks
From India, Malappuram

Attached Files
File Type: pdf PF not applicable on CTC 18.3.2014.pdf (530.4 KB, 2917 views)

Dear Mr. Agrawal,
Thanks for sharing such knowedgable circular with all of us & specially, its just issued by yesterday & very promptly you shared with all memebers. it is very appreciative.
but, just make me correct, if i am wrong that, this circular is issued for internal dept. as instructing to staffs to avoid the any unncessary litigation matter by missustanding about that, employer doing anything wrong by consider PF contribution in CTC.
Its actually not said that, PF shall not be applicatiable on CTC. it is only specified that, how come is logically correct to consider in CTC.
Please correct me, if i am wrong.
Tushar Swar.

From India, Mumbai
Dear Friends, Kindly explain in future we need to deduct EPF only for Basic+DA or Gross......if Basic+DA below 6500/- what we need to do.... Regards, Suresh Kumar M
From India, Coimbatore

Dear Sir,
thanks for sharing the circular issued by the Ministry of Labour on Provident fund.
I want to know if some company are doing their business against the Govt and PF rules are not following properly as per govt norms.
Even though PF is contributed only 3 to 5% from the basic and going to PF office.
How is possible that PF Inspector is ignoring the contributing % from employees and employer. (e.g Basic is 23295, HR 11648 Conv 800 and PF 780).
As per my knowledge the PF should be 12% of Basic. so tell me is it correct the above example. I am blaming to organization but my question on the inspection as well as commissioners of Delhi/NCR. how do they ignore this kind of bid organization where are 1200 plus employees there.
These all raised after the gone through the circular.
can you please high light on this ?

From India, Delhi
Dear Silva,
As my understanding EPF ceiling is Rs.6500/- (6500*12%=Rs.780)...if beyond the ceiling amount employer need not to cover for their Basic amount....if i am wrong correct me....
Suresh Kumar M

From India, Coimbatore

Dear Mr. Suresh,
Thanks for your kind concern and highlighted on the same and your also correct.
But i could not understand the logic of this. there is any article which is indicating and recommending this.
Thank you in advance for your kind reply.
Silva Kumar

From India, Delhi
Dear Senior, please tell me first that employer can share epf in CTC. (employer contribution) Regards Dhananjay Patil
From India, New Delhi
Thanks for sharing such knowedgable
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From India, Taramani
Dear Team,

Warm greetings!!!

I appreciate Agrawal for posting the information.

Thanks a ton.

For PF :

PF is always calculated as 12% on Basic +DA+Retaining Allownaces if any. There are two ways:

1. 12% on the above irrespective of your Basic.

2. 12% on the above but maixmum up to Rs 6500/- on Basic/or Actuals that is less than Rs 6500/-. Hence we do take as Rs 780/-. However there is VDF (Voluntary Deduction Provident Fund). Only Employee can contribute more than 12% on above. Here employer pay only Rs 780/- or in as per Ist Clause if applicable. Employer do not pay VDF.

Employer and Employee PF contribution is added in CTC while appointment Letter/Offer Letter is issued that is 25.61%. In actual 12% employee contribution, 12% Employer Contribution ( 8.33%-Employee Pension Fund and 3.67% again add with Employee contribution .On EPF ( Employee Pension Fund) maximum Rs 541/- was deposited more than that deposited in Employee Contribution) 1.1% of Basic as Admin Exp,0.5% EDLI to be calculated on Rs 6500/- only if the basic is more than Rs 6500/- if less then on Actuals,0.01% Inspection Charges to be calculated on Rs 6500/- only if the basic is more than Rs 6500/- if less then on Actuals.

Please let me know if you need any further information in this regard.

Warm regrds,

Pranab Chakraborty


From India, Mumbai
Employer contribution of PF, normally shown by the company in the CTC (cost to the company) .
It does not mean that they are deducting the PF contribution from salary.
The circular also said that showing employer contribution in CTC is not at all wrong.
Some companies beyond the ceiling amount (Rs.6500) , they are contributing to PF on the total salary of basic+DA ..
Some companies are restricting PF contribution to the ceiling amount. It depends on the company policy.

From India, Hyderabad

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