Hello,
It is neither appropriate nor is it justified to deduct employer's contribution to PF from employee's wage.
Sec 12 of the EPF and Misc Provisions Act 1952 mandates that the Employer shall not reduce wages etc. and Clause 31 of the Employees Provident Fund Scheme mandates that Employer's share not to be decucted from the members.
I suspect slight confusion in your querry.
CTC or "Cost to Company" is an internal budgetting tool for the management to check and control total Employee Related Costs to the organization. CTC includes the wage and in addition the conditional and , indirect payment that an employee may be entitled to as a consequence of his employment. Professionally I have no objection to the use of the CTC concept but only when it is used for budgetary control.
I consider it entirely WRONG to negotiate salaries on the basis of CTC as when conditional payments (like bonuses, incentives, housing loans and/or interest subsidies etc) do not come through (for no fault of the employee), what the organization gets is a disgruntled employee and what the organization loses is CREDIBILITY!!!
Therefore while employer's share of PF contribution can be a part of CTC, it should not be used to bloat the figure to attract a potential candidate. If an organization does that it will have to regret sooner than later!
I hope the issue clear now!!
Regards
samvedan
March 13, 2009