Hi all,

Can an employee's contribution be deducted from gross salary each month before deducting employer's share from monthly CTC?

For example,
Mr. X's monthly CTC is 26,8000
With structure of
Basic 15000
HRA 7500
Allowance 2500
PF @12℅ 1800
Total 26,800
So, can a company first deduct employees' contri. To PF from basic salary
And after that deduct employer's share too?
26800-1800-1800=23200 - in hand salary?
Is that acceptable?
Or it should be
26800-1800=25000?

I really need to understand this. When they said Employer's share is part of CTC, so do both PF share will be part of salary structure of CTC or just one PF? If only one PF amount is part of Salary structure, than how can employees contri is deducted from basic salary after that?

Any explanation will be appreciated.

Thank you in advance!

From India, Mumbai
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Nanu1953
Ceo-usd Hr Solutions

The concept of CTC is what organization spent for the employee not the employee spent for him/her either for statutory compliance (PF) or voluntarily ( VPF). Therefore, question does not arise to consider any spending by employee as a part of CTC.

23,200/- less PTAX if any will be the take home salary when monthly CTC IS 26,800/-. Employee contribution of PF, PTAX if any are not the part of CTC as those are not spent by the employer for employee.


S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
Dear Friend,

The CTC means an establishment spent by employing an employee.
For example, Mr. X' is an employee who receives monthly salary as per following:
1. Basic 15000 +HRA 7500+Allowance 2500= Rs.25000/- Gross
Cash in Hand of Employee is : Rs. 25000 - PF @12℅ 1800= Rs.23200/-
But company spends for that employee is Rs. 25000+PF @12℅ 1800= Total 26,800 is the CTC

2. Suppose the establishment under coverage of ESI, can a company first deduct employees' Basic 15000 +HRA 7500+Allowance 2500= Rs.25000/- Gross Salary
Net salary is : Rs. 25000 - (PF @12℅ 1800+ @ESI 0.75% Rs,157.50)= Rs.23042.50/-
But company spends for that employee is Rs. 25000+PF @12℅ 1800+ ESI @3.75% Rs.787.50= Total 27,588/-is the CTC.
Hope you understand the thing.

From India, Mumbai

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