Anonymous
Dear HR,
Please help me to know while working in company when we take earned leave our pf deposited by employer.
But when we leave company n company do full n final so while leave encashment employer side pf contribution paid to employee because it's earned leaves payment.
Please answer me please

From India, Gurgaon
Dear friend,
Encashment of EL on termination of employment or otherwise does not attract contribution to EPF.
When the employer is not statutorily required to contribute to EPF, he need not pay to the employee too on leave encashment. Ordinarily, employer's contribution to EPF does not form part of the wages payable to the employee. Therefore, such a demand is not legally maintainable.

From India, Salem
Anonymous
Dear Umakanthan.M Sir,
Thank you for answering my question my query is if employer side PF contribution is shown as part of employee CTC in that case do employer pay employer side PF share with leave encashment amount to employee as plus because PF contribution is not applicable on leave encashment .
Thank You

From India, Gurgaon
Dear friend,
I think that if we understand the concept of CTC objectively, it is only a statement of projected annual expenses incurred by the employer in respect of an employee. As such, CTC would comprise of the annual gross salary, all other statutory and non-statutory contributions and all the other benefits which can be computed in terms of money spent by the employer. The employer's shares of statutory contributions to ESI and EPF are computed only on the basis of the sum total of the components in the wage structure which are treated as ' basic wages'. This principle equally applies to the payment of bonus and gratuity also subject to the statutory norms of eligibility. Thus the natural corollary would be that 'basic wages' do not include any of the expenses incurred by way of fringe benefits whether they are statutory or otherwise. Moreover, they are also not deductible from the gross wages and surrender leave salary or the amount of leave encashment is the salary payable but for the enjoyment of the leave surrendered only.
Hence just because employer's contribution to EPF is shown in the CTC, it cannot be argued to be included in the leave encashment.

From India, Salem
Anonymous
Dear Sir,. Thank you for briefing.
From India, Gurgaon

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