PF Deduction - Pf Deductions [Thread 536968] - CiteHR
Assistant Engineer, Indian Telephone Industries,
+1 Other

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Greetings All,
I am a frequent visitor of this forum and it left me in awe seeing the spontaneous responses from the eminent HR's for the queries posted.
I have a small query pertaining to the PF deductions. The PF is deducted from the salary which constitutes 12% from the basic pay. and 12% is from employer end. My query is,
1.Is this 12% employer's contribution is included in the employee's CTC or not which is mentioned in the offer letter.
2.Is there any thumb rule that the CTC should not be deducted from the employee's salary(i.e.Employers contribution from employee salary).
3.If it is done so(Deducting employer's PF from employee's salary) then is it legitimate. If not,what is the best possible thing that could be done.
I am Callow about this PF deductions and it would be great if someone advocates me to clear this ambiguity.
Thank You in Advance.

Dear Mohammed Arif, You may show employer share of EPF in CTC. But it should not be deducted from employees' salary. Abbas.P.S
Dear Arif,

CTC (Cost to Company) refers to the total amount of expense an employer spends for their employee... hence It includes the employer contributions...

1. CTC includes the Employer contributions which will be mentioned in the Appointment order.

2. As per EPF act, Employer contributions should not be deducted from an employee. but there is no relation between EPF act and CTC...Many companies will fix a consolidated pay and deduct the employer contribution from their employees..

3. Your pay may be fixed as the below

Type - 1

Informing you a salary of Rs.11364/- and not deducting the Pf Employer contribution from employees

Wage 11364

12% Employee 1363.68

12.36% Employer 0

Net 10000

Type -2

Informing you a consolidated pay of Rs.10000/- at hand and deducting the PF Employer and Employer contribution from employees

Wage 13220

12% Employee 1586.4

12.36% Employer 1633.992

Net 10000

Both the Calculations are similar as you get Rs.10000/- at hand every month. It depends on the employer calculation of CTC.

Hi All, Thank you for responding to my query. Now I got a Clarity and I regret making a flaw in my 2nd question in which I ought to mention PF instead of CTC.
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