Employer's Contribution In PF

Dear All,
I need information about Employers contribution in PF. Is it considered as a part of CTC ? Can employer's contribution in PF is consider as a part of Cost to the company with special reference to ISP and web hosting Company.
Regards,
Supriya
HR

Dear Supriya,
CTC is a very wide concept. You may add any cost that the organisation is incurring in retaining an employee to the CTC.
Regards,
Sunil Joshi

Dear Sunil,
Thanx for your reply. but my doubt is about contribution of employer in Pf .should it be the part of cost to the company or not . when we consider it should be then we have to deduct two times PF ( from employer and employee side) from gross salary . I want to know is there any spcification about this in PF act.
Please reply soon.
Regards,
Supriya

Hi Supriya,
PF has two parts:
1) the employees contribution which is 12% of the Basic salary and 2) the employers contribution which is 12% of the basic salary.
The employers contribution is something that the organisation puts in( this is not deducted from the employees salary).
So you can add 12% of the employers contribution into the CTC
Hope this helps
Thanks
Sherine

Supriya,
In most companys PF contribution from the employers is added as a part of the CTC, so you will find that PF has been deducted twice, but it your contribution and the employers contribution.

CTC - Cost to Company,
In CTC Salary Distribution will be ,
(A) Basic Salary + HRA + DA
(B) Conveyance + Medical + Other / Special Allowance if any
(C) Employers Contribution for PF (12% of Basic)
Employers Contribution for ESIC (4.75% of Gross)
(D) Employees Contribution for PF (12% of Basic)
Employees Contribution for ESIC (1.75% of Gross)
Gross Salary = (A) + (B)
CTC = (A) + (B) + (C)
Net in Hand = (A) + (B) - (D)
Thanks and Regards,
Amol Agaskar (SR. HR Executive - HR Opeartions)
HRprowess

Hi,
Provident fund is calculated as 12% basic plus D.A.
The PF has two parts, Employee's contribution and employer's contribution.
Normally, CTC or the Cost to the company includes all the costs incurred by the company on any employee. So it should include the employer's contribution of PF.
Furthermore, for your understanding, PF is divided into two parts : Employee provident fund (EPF)and Family pension fund(FPF). The calculation goes like this
PF(12% Basic + DA) = FPF(8.33%) + EPF (3.67%)
Any further information required, Please revert back.
Regards,
Avi

Dear Supriya,
PF can be added as a part of CTC (employer's share) of an employee.
And only employee's share (12%) can be divided from his montly gross
salary.
Kindly refer to the below mentioned example where CTC offered is Rs. 2.16 lacs p.a.
Basic 9000.00
HRA 4500.00
CCA 1420.00
Conveyance 800.00
Education 1200.00
Gross p.m. 16920.00

PF (Employers share) 1080.00
CTC p.m. 18000.00
in the above example net salary will be calculated as Rs.16920 - 1080 (employees PF share) = Rs.15840
The employers share of PF has been shown in CTC in advance.
Similar manner some companies show ESIC as a part of CTC .
Regards,
Sumeet

hi,
above the all the concept is good & Correct , still you have any doubt on this you can call me @ 09840485689.( chennai No).
Ans for your qts.
you have to deduct only 12% on the basic salary from the employee,( from Montly Staff Salary)
As per the Rule of Pf the Employeer should contribute 12 % and 1.61 % for admin charges for maintenance of the PF & Insurance Accounts)
So what ever the benefits are given to the employee in any form that should be added to the CTC of the employee
This is a concept of PF & CTC.
Regards
Kugan Paramasivam.

Added to what others have already i would like add this -
Employer's Contribution should be taken as CTC.
As CTC is a concept which includes all the cost which an employer incurs for any employee..
More so that there are companies, which includes gratuity in the CTC.
It is absolutely fair that PF (Employer's Contrib of 12%) is taken into account. Also the Employee (depends on what his pay scale is) has the provision to opt out PF.
Please don't have any confusions in that.
Regards,
Poorna