Jeevarathnam
Sr. Manager Hr/admin
Pon1965
Construction
+2 Others

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Labour Minister assured to increase ceiling limit from 6500 to 15000.
Here starts the dilemma for employer & employee of those organizations where PF is deposited on 6500. And now it will be deposited on 15000. But the problem is -The employer contribution is now increased from 780 (6500*12%) to 1800 (15000*12%) but company has already shown Rs 780/- in CTC. So in this case which option company will adopt...
Option 1: Should they revise the Salary letter and show PF contribution (Employer) 1800 in CTC (because this is an extra Burdon on company)
Option 2: Should they revise letter on next Appraisal/ Next increment letter
Option 3: Company should not include the extra amount (1800-780=1020/-) in CTC (because the in-hand salary of employee will be lesser now after including employee & employer part)
Please suggest...

Dear Friends. Please share your comments in relation with CTC issue:)
it is very simple, if the Govt raised the IT slab then ultimately it is going to be deducted from the employee salary & when a company is following a CTC model ultimately it is to be to the employee account.
The other side of the coin if the Govt. reduces the PF ceiling to Rs. 5000/- and then ultimately the contribution is going to be reduced to Rs.600/- against Rs.780/- and no employee accepts to reduce his salary to that extent hence it is to be to the employee account only.
Regards - kamesh

I agree with Mr. Kamesh's comments. Generally, any change in statutory deductions, both the employee & employer will share the burden. In this case, due to higher PF contribution, the employees take home salary will be less but at the same, due to higher employer contribution, PF savings also goes up. In anyway, the employee will be at loss as most of companies are not following CTC concept, wherein the employer PF contribution is included & deducted from the employees salary. Financial impact to the employer will be to the minimum. It depends upon the concerned Mgmt.'s decision to revise the employees CTC mid-term or during the next pay revision.
Regards,
Selvaraj Ponnuswamy

Sorry ! My previous statement should be read as " In anyway, the employee will be at loss as most of companies are following CTC concept, wherein the employer PF contribution is included & deducted from the employees salary. "
Regret inconvenience for the typographical error.
Regards,
Selvaraj Ponnuswamy.

What happens to the employees whose salary is less that 15000/- pm Regards Sangeeta
If the employees is less than 15000/- tehn PF shall be contributed on actual wages only.
CTC term is flexible. The gross shall not change. You can reduce the addl. burden in some other allowances. In effect, the final tally of CTC remain same. Pon
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