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Hi
We contribute 12% towards PF(out of which 8.33% goes to pension and rest to pf).
we can withdraw the PF amount when we leave the organisation , but what about the pension amount..how do we get that?
Do we receive the pension amount when we leave or what is done with that amount,it remains with the organisation or paid of to the employee?
From India, Mumbai
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Your query is a subject matter under Employees'Provident Fund and Miscellaneous Provisions Act,1952 and Schemes. Actually, the employee's contribution (Your contribution ) goes to your P.F.Account. Out of the matching contribution given by the employer, 8.33% subject to a maximum of rs.541/- is diverted towards the Employees' Pension Scheme under the Act. This amount is deposited by the employer every month with the Regional P.F.Commissioner of your area. Upon your transfer or on joining another organisation which is covered under the Act, you should get the amount transfereed to the nearest RPFC by filling up the relevant form (Form 13-A-Revised). The pension under the scheme is payble on attaining the age of 58, even though you may be serving in your organisation beyound this age say up to 60 years.
Ashok
From India, Bhubaneswar
Hello Ashok, It seems to be the you are right person to clarify my doubt!!! Actually my doubt is like what is the diffference between CTC & gross pay? Regards, Joshi
From India, Hyderabad
Dear Joshi,
Thanks for the compliment.
I am not a compensation expert but let me try to throw some light on this.
CTC or cost to the comany is an inclusive concept. It includes, besides the gross pay, several other cost components which the employer incurs on its manpower. Costs incurred towards pension contributions,EL encashment, Gratuity etc which are not paid out to the individual employee on aregular basis but are nevertheless borne by the employer are instances of CTC. Net pay is the actual amount or the cash in hand that you get after the applicable deductions.
Ashok
From India, Bhubaneswar
KIND ATTN: MR. Ashok Kumar Mishra
DEAR SIR,
I'm a new member to this CiteHR.com and would like to know about PF & ESI. According to my knowledge 12% of contribution (from Employees) on basic salary goes to the PF. And remaining 12% from the Employer.
if basic salary is 25,000 then the contribution from the EMPLOYER is 3,000/-. BUT THERE IS CEILING LIMIT on 6500/-. (or) 780 only.
Please clarify my Doubt.
And also requesting you to give your Contact details along with your E-mail ID.
Regards,
K. Ravi Kumar.
E-mail:
Ph: 09989111149
From India, Hyderabad
Dear Ravi,
If I am not wrong, you have caliculated that in a wrong way.The PF will be deducted on the basic salary of the employee but not on the total salary.
I suspect the % are like employee's contribution is 12% on His/Her on basic salary, and employer's is 13.01% or 13.91%.
If I am wrong please correct me!!!!!!
Regards,
Joshi
From India, Hyderabad
Hi Joshi,
P F Employee Contribution is 12% and Employer contribution is 13.61% from basic, whereas for ESI employee contirbution is 1.75% and Employer contribuution is 4.75% from gross.
Thanks,
SaiUma
From India, Madras
Dear Ravi,
If a person drawing 25,000/- salary per month,from his basic only PF is paid and from gross ESI is paid,and as you mentioned there is a ceiling limit 6500/- but it depends on employer wish,if he is ready to pay for above 10,000/- he has to produce a letter to PF dept and than he can pay PF for employee.
Thanks,
Uma
From India, Madras
Hi Ashok
Thanks for the information.
But if a person decides to leave the job any not plan to work in the coming years. In such situation also, a person will get the amount after he/she attainds 58 yrs of age.
From India, Mumbai
This is K. Ravi Kumar from Hyderabad
Please calrify my doubt regarding provident fund contribution, below i'm giving you some pay detail of my colleague.
BASIC 17,510.00
House Rent Allowance 7,004.00 (40% of Basic)
Transport Allowance 1,751.00 (10% of Basic)
Performance Incentive 5,253.00 (30% of Basic)
------------------
31,518.00 (GROSS SALARY)
P.F = 2101.00
Professional tax = 200
TDS=1500
NOW CLEARLY TELL ME THE EMPLOYEES CONTRIBUTION AND AS WELL AS EMPLOYERS CONTRIBUTION.
REGARDS,
K. Ravi Kumar.
E-mail:
Ph: 09989111149
From India, Hyderabad
Hi Ravikumar,
As you mentioned abt contributions of employee and employer are correct. Both are contributing 12%each, which is calculated on Basic salary+DA, subject to the ceiling limit of Rs.6,500 as per act.
It means even if you are getting more than Rs.6,500, they will calculate the contribution on 6500 only. If you are interested to pay more you can opt for that. But employer will calculate on Rs.6,500 only.
I think I mentioned clearly. If I am worng plz correct me.
A.Ravikanth
Mobile:9848294239
e-mail:ravikanth.allanka@gmail.com
From India, Hyderabad
Hi Ravikumar,
Here i am mentioning clearly about Contributions for PF.
Employer 12%

Employee 12%-----(8.33% goes to Pension Scheme)
(remaining 3.67% goes to PF)
So, according to this totally 15.67%
(Employer12%+Employee3.67%) will be in PF.
If you have doubts or if you need to correct me feel free to mail me.
A.Ravikanth
9848294239

From India, Hyderabad
I'm very much confused about the Provident fund.
Employee's Share is 12% of basic.
Employres Share is 12% of basic out of which (8.33% goes to the Pension and 3.67% goes to the Provident Fund)
Here I'm attaching My Payslip as well as my Senior Colleague's payslip in this you tell the EMPLOYERS SHARE,(EMPLOYERS CONTRIBUTION) THAT HOW MUCH GOES TO THE PF AND PENSION.
PLEASE HELP ME IN THIS REGARD.
Regards,
K. Ravi Kumar.
E-mail: kasinaravikumargmail.com
Ph: 09989111149
From India, Hyderabad

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Dear Joshi,
I need one clarification regarding employer contribution. i'm totally confused about the employer contribution.
Here with i'm enclosing my payslip and as well as of my colleagues, depend upon that please tell me the contribution of employer.
AND I'M AWAITING FOR YOUR ANSWER.
With regards,
K. Ravi Kumar.
E-mail:
Ph: 09989111149
From India, Hyderabad

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Dear sir,
Please find the attachment.
I am confused, for Mr. Rajshekhar naidu basic salary is Rs.11300/- and we paid the PF employee and employer contribution @ 12% is Rs. 1356/- each.
My doubt is:
1. In Combained chellan A/c I and A/c 10 calculation is correct?
2. In form 3A and 6A EPF and Pension Fund amt is correct?
(i calculated in combained challan A/c 1 and A/c 10 of employer share at the basic of 6500/-)
(but in the form 3A and 6A i canculated the EPF and Pension fund at the basic of Rs. 11300/-)
Actually the calculation is based on the basic of Rs.11300/-
Please kindly clear my doubt as soon.
Best regards,
Revu. :-x
From India, Madras

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File Type: xls format for 3A (yearly returns).xls (26.5 KB, 829 views)

Dear Sir,
I have just joined this HR. Questions and answers displayed are great. Claryfing every doubt about hr related queries.
My query is I am working with organisation in mutual fund from last 16 years. I want to skip the job, how do I calculate my CTC and what are other offerings in the industry today. My age is 39 years. My basic is 18300/-.
From India, Nagpur
Dear Sir,
I am with the organisation from last 16 years. I have self provident fund with organisation where employer is not participating and having pension also where employer is participating. Suppose I decide to leave organisation today, may i will be eligible for pension, if i join other organisation, please guide me.
From India, Nagpur
Dear Kasina Ravikumar,
Your contribution to EPF is Rs. 2101. Out of employer's contribution Rs. 541 (8.33% of 6500, which is ceiling) will go to pension fund and Balance Rs. 1560 to EPF as employer's contribution.
Abbas.P.S
From India, Bangalore
Let me put my words it is not 13.91% but it is 13.61 % breakup is In a/c 1 3.67% not actual (actually it is a difference between 12% - 8.33%) then a/c 2 1.1%, a/c 10 8.33%, a/c 21 .5% & a/c 22 is .01% which is equal to 13.61%/
Regards Milan
From India, Pune
dear sir plz tell me if any person injured in accident can he is entitle for pension SURINDER SINGH
From India, Gurgaon
Dear Sir,
I'm little clear on the calculating the PF amount but getting confused because of my employer calculation, please find the below detections and clarify my doubts.
My Salary Breakup
Basic - 5028
FDA - 2514
-------------------
Total - 7542
-------------------
Employee contribution - 905 (12 % of Basic +FDA)
Employer contribution - 239 (12%-8.33% from 6500 ceiling limit)
Pension Scheme - 541 (calculated with the 6500 cieling limit)
My doubt is employer has calculated the
employee contribution is calculated with both the Basic + FDA which is above the 6500 ceiling limit and
employer contribution is calculate with only the basic salary which is below the 6500 ceiling limit.
is this the calculation is right????
or the employer is calculating wrongly????
please clarify my doubts,
Thanks in advance...
regards,
R.Prabu
From India, Coimbatore
dear joshi sir, you’re correct ,the PF amount will deducted in basic salary (12%). employer contribution on gross 4.75%
From India, Ahmedabad
Subject - Re: provident fund and pension
This is v.kamalnath
Please calrify my doubt regarding provident fund the employee already taking pension amount again he is joining the other company the employer has deduct the pf contribution or his not eligible for PF
regards
V.KAMAL
From India, Bangalore
Hi Friends,
Can anybody guide me that if I absconded from a Organization do I eligible to get my PF amount,otherwise can I transfer the full PF amount to the other Organization after absconded from previous.
Thanks & Regards,
Sangram.
From India, Ahmedabad
Dear Surinder Singh, If the member become permanently and fully disabled, he will get pension. Abbas.P.S
From India, Bangalore
#Anonymous
Dear Sir, If a compnay does not have a pension plan in place, then what would be its PF contribution (from emplyers as well as employee sides).Thanks!
From India, Kolkata
Hi Joshi,

Many Of Us having confusion regarding Salary, Net Salary, Gross, Cost to Company they are same or different. I Hope this may help you in clearing you doubts. I shall try to cover what makes the salary? What is the difference between Salary, Net Salary, Gross Salary, Cost to Company.

How people earn money?

The three broad ways in which people earn money are as follows:

1. Working for someone else or Employee

2. Working for themselves or Self Employed

3. Running a Business.

When a person works for someone else or company, he/she is then said to hold a job and is called Employee. The person or the company he or she works for is called Employer.

“Money that is paid is called as Salary or Income or Wage”

#Salary- Money that is received under Employer-Employee relationship is called as Salary. If one is freelancer or are hired by an organization on contract basis, their income would not be treated as salary income. (In such case your income would be treated as income from business and profession).

Did you know that word salary has come from Latin Salrium based on Salrius which means pertaining to salt. The word appeared in 1350-1400. In those days, salt, regular ordinary table salt was a prized and valuable commodity. It was money given to Roman soldiers to buy salt. The phrases the salt of the earth or worth your salt refers to the high value of salt.

The salary consists of following parts

#Basic Salary: As the name suggests, this forms the very basis of salary. This is the core of salary, and many other components may be calculated based on this amount. It usually depends on one’s grade within the company’s salary structure. It is a fixed part of one’s compensation structure.

#Allowance: It is the amount received by an individual paid by his/her employer in addition to salary to meet some service requirements such as Dearness Allowance (DA), House Rent Allowance (HRA), Leave Travel Assistance (LTA), Lunch Allowance, Conveyance Allowance, Children’s Education Allowance, and City compensatory Allowance etc.



#Perquisite: Is any benefit or amenity granted or provided free of cost or at concessional rate such as Rent free unfurnished house, Rent free furnished house, Motor car facility, Reimbursement of Gas, Electricity & Water, Club facility, Domestic Servant Facility, Interest Subsidy on Loan , Reimbursement of medical bills, Reimbursement of Hospital bills, Reimbursement of telephone bills, Benefits derived by employee stock option, and so on

Deductions: Two type of deduction are made from salary

Compulsory deduction such as Provident Fund, Income tax, Professional Tax (where applicable) .

Optional deduction such as recovery for advance or loan if taken, voluntary contribution to P.F etc

Provident Fund Contribution

Provident fund contribution has two sides – the employer’s contribution and employee’s contribution. This is usually 12 per cent of the basic salary. However, this contribution is not paid out . It is directly deposited in Provident Fund (PF) account and paid to employee when he retires or resigns. There is also employee’s contribution to PF. This amount is deducted from his monthly salary and deposited in his PF account. For details on provident fund you can read Provident Fund (PF) and Voluntary Provident Fund (VPF)

Different types of salary

Gross Salary: is the amount of salary paid after adding all benefits and allowances and before deducting any tax.

Net Salary: is what is left of your salary after deductions have been made.

Take Home Salary: Is usually the Net Salary unless there are some personal deductions like loan or bond re-payments.

Cost to Company: Companies use the term “Cost to Company” to calculate the total cost to employee .i.e. all the costs associated with an employment contract. Major part of CTC comprises of compulsory deductibles. These include deductions for provident fund, medical insurance etc. They form a part of your compensation structure but you not get them as a part of in-hand salary. As such, although it increases your CTC, it does not increment your net salary.

The phrase "Cost to Company" or CTC, as it is commonly known, means different figures to different people.

-For the Company, Cost to company is a term which essentially implies the amount of expenses the company will spend on an employee in a particular year. What may be an expense for the company need not necessarily be salary for the employee.

-For employees, Cost to company is an amount projected by the company as salary but is never what is actually received by the employee in cash.

-For the Finance Manager it is the total cost incurred to hire, maintain, retain the employees and may also include a part of overhead cost allocation.

• Recruitement Cost

• Base salary

• Bonuses

• Administrative

• Office Space

• Technology

• Benefits

Components of CTC

• Salary like Basic, DA, HRA, Allowances

• Perquisites and Reimbursements given to employees (i.e.) - bonus, incentives, reimbursement of conveyance/medical/telephone/, benefits extended through various schemes like housing/vehicle/furniture/ Air-conditioners etc.

• Contributions that the company makes for the employees like PF, Super Annuation, Gratuity, Medical Insurance, etc.

• Reasonable estimates of Leave Encashment, Stock Option Plans and Non cash concessions

• Tax Benefit on Stock Option plans only.

Difference Between CTC & Take Home Salary

And for most people it is plain confusion! This confusion prevails even now amongst the older employees. Most of us do not understand that there is a big difference between the follwing.

• CTC

• Gross salary

• Net salary (Take Home Salary)

Cost to company (CTC) is the total cost that an employee is incurring in a company. Gross Salary is the one which you see every month. But this is before any deduction.Net Salary is what an employee get to his/her hand after deductions.(this is the take home salary)

The relation between all three

• Gross = CTC - Other benefits

• Net = Gross - Deductions

While switching jobs, people end up thinking that a hike on CTC as shown on the offer letter will increase the in-hand salary, But there are various components of the CTC that affect your in-hand salary.Some of these components inflate your CTC but you do not get them as a part of your monthly pay.

1. Basic Salary: Basic salary is a fixed part of your compensation structure and the complete amount becomes a part of your in-hand salary.

2. Allowances: Apart from the basic salary, there are some allowances that your CTC will contain. Examples include HRA, conveyance allowance, leave travel allowance. Some of these allowances are tax free up to a certain limit and some of them are dependant on your actual spending.

3. Caims: A part of your salary may also be made up of your billed claims. These include components like mobile allowance, medical allowance etc. There is a maximum limit set to these components and are paid when you submit your bills. These are usually tax free.

4. Deductions: A major part of your CTC comprises of compulsory deductibles. These include deductions for provident fund, medical insurance etc. They form a part of your compensation structure but you not get them as a part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary.

5. Performance linked pay: Linking a part of the salary to productivity and performance has become a trend today. You get the complete amount only on 100% achievement of target, but it forms a part of your CTC, fattening it up.

6. Taxes: Taxescause further leaks in your salary.Taxes are an unavoidable evil and they eat up a large chunk of your salary. Taxes are obviously never mentioned in your offer letter.

Conclusion- Guys when you receive a good offer consider all these components separately and understand the impact they will have on your in-hand salary before deciding to take up that alluring offer. Also ensure that you have calculated your tax liabilities with the new income in accordance with the tax policies to figure out the amount you will receive in your pay cheque.

Please take a few minutes to give your feedback in order to enhance all Cite HR Members knowledge.



Regards

Ankita

Executive HR

“A candle loses nothing by lighting another candle.” In other words, be willing to help others and

share your knowledge and insights with others who may benefit
From India, Patna

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Dear Mishra, I have a doubt regarding the calculation of Basic Salary (on what percentage is the basic salary) could you please help me with this .
From India, Bhimavaram
Dear Sir,
I just got a doubt after reading all above discussions and left with question what about PF Pension Amount if I die before attaining 58-year of age, what would happen to that amount?
Thanks in advance.
--
Sumit Garg
From India, Gurgaon
I changed my organization last year and transferred my PF account related amount. Now when I see my downloaded PF passbook, I see amount in deposits (employee, employer share). But while checking into "Diverted to Pension fund" column, it's showing as ZERO.
As per my understanding 541 rs per month goes to pension fund and after my 5 year of service, i believe the pension fund amount should have been around 30,000. Please can you help me out in understanding why this amount is not shown in transferred amount.
Can it be a system glitch or it gets lost when you switch company?
Many thanks in advance.
From India, Bangalore
if a labour has it basic salary of Rs-4000/month and he /dhe is working from last 2 years please give me the idea that how much pf is saved in his/her pf account
From India, New Delhi
For 4000 Rs per month , PF comes around 480 Rs per month ( 12% of BS) .
Now it depends whether there was a contribution by the labour also towards PF or it was only Employer contribution ?
So if was only employer PF amount should be around ( 3520Rs Appx + interest ( PF fund) 8000 Rs Appx ( 8.33% of BS Pension fund) ) and if there is employee contribution so add Rs 11520 more to it ( + interest).
From India, Mumbai
HI This is Rajasekhar from Warangal..
Employee share of my pf account is 60200, Employer share is 21712 and Pension fund is 32691...
How much amount will i get if i resigned my job.....
Thanks,
Rajasekhar.
From India,
Hi
please anyone can help me out, to know about pension part in EMF
for example - i left one organisation after 5.3 years & joined other one & during PF transferring only employee share (Rs 79545) & Employer share (Rs 38520) are given & pension/contribution (Rs 0) was shown
I received only 79545 + 38520 = Rs 118065
please explain !
regards
sudhir
From India, Sirsa
SIR,
ONE PF EMPLOYEE CROSS 58YEAR AND SERVICE COMPLET 6YEARS NOW WE KNOW THAT PF CONTIRBUTION AMOUNT WILL GO IN PENSION SCHEME YES OR NO OR PF CONTRIBUTION FULLY GO IN EMPLOYEE PF FUND
SO PLEASE CLARIFY
REGRD
NARENDRA KUMAR
From India, New%20Delhi
Dear Mr. Ravi.. tried calling but no luck as ur cell is showing switched off can u be so kind to let me know what happens to d empoyers contributions which goes towards d pension fund.. .
Do we get it back along with PF when we withdraw when we change job or it just remains with epf office.
How can we check d balance of pension fund.
PF Balance shown on epf site /mobile app is it along with intrest earned till date or just the contribution..
Regards. Kisshor T.
From India, Thane
Clarify me regarding EPS -
1. I have transferred my PF from Old Org. 1 (PF Trust and RPFO, Bandra) to New Org. 2 (PF Trust and RPFO Ahmedabad). When I have received Old Org. 1 letter, I got to know that only my PF amount got transferred and Amt under EPS were retained/to be transfer from RPFO (Bandra, Mumbai).
2. Now, I have changed my Job from Org. 2 to New Org. 3 which has new RPFO (at Vashi, Navi Mumbai). I have applied for online PF transfer (mid October) as both Org. (2 & 3) having digital signature and still under process after 1.5months. As Org. 2 has PF trust, It might be possible EPS amt kept at regional PF office, Ahmedabad due to trust involvement.
How can I transfer EPS amt from Old Org. 1 (RPFO Bandra) to New Org. 3 (Vashi, Navi Mumbai).
Will it be the same condition as point 1 or EPS amt along with PF amt will be transferred from Org 2 to Org. 3 RPFO.
Or if is not transfer to Org. 3 RPFO, then How would I process for the same..!!
Thanks/Regards.
Ashok

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