How To Distribute Employer Contribution 12% PF

hi...
Dipali here i have joined a company as hr executive. i had nevr caluculated salary of employees here i have to calculate salary of each employee.
Now the que is i have to distribute 12% employer contribution (PF) in each employee salary.
Does it added in Only CTC or how can i distribute those 12% in convanyance allow, Medical allow, Special allow, HRA ?
Please help me out ...Reply as soon as possible as have to submit the salary sheet today itself...

Hi Dipali,
Kindly put your question clearly, from what i understood following is the answer.
You need to show that as a part of CTC under the heading employer contribution to PF. You can not distribute that in other allowances.
Regards,
Harshad

Hi Dipali,
You need to show that seprately only. You can club the figure in Special allowance till the time one does not opt for PF or PF formailities are completed.
Regards,
Harshad

Hi Dipali,
Show under the heading of PF, This is the only way to show the pf by employer. It cannot be clubbed with HRA, Medical, Spl. Allowance and will be a part of CTC.
Regards,
Dev Agarwal

hi...again i am facing prob my employer saying that what ever ctc is there u just deduct some amt or % from Ctc and then adjust the employer contribution 12% in basic salary ... i am not understanding what is the exact way to adjust the 12% employer contribution in individuals salary ctc...
can somebody help me out...
Reagrds,
Dipali

Hi Dipali,
You can show PF 12% of basic in CTC and the same will be considered as employer contribution. While preparing the salary sheet for a particular month, you need to deduct PF 12% on earned basic which will be employee's contribution.
For example, suppose an employee's monthly CTC is 20,000/-. The CTC breakup can be shown as Basic - 5000/-, HRA - 2000/-, Conveyance - 2000/-, Special Allow - 9150/-, Medical - 1250/-, PF - 600/- (employer contirbution).
While calculating his monthly salary the calculation will be as follows.
Gross salary = 19400/- (Basic+HRA+Conv+Spl Allow+Med)
PF deduction = 600/- (12% on earned basic / not arrived from the CTC)
Net Payment = 18800/-
Hope this will clear your confusion.
Regards.
Pradip

Hi Dipali
We understand that you have to wotk out salary figures of your employees. For this you should not distribute employer's contribution of 12% towards PF. It is shown in CTC as it is cost to company which is paid to State Bank of India alongwith employee's contribution.
While calculationg Salary, you should add up monthly payment components and deduct from it PF 12% on Basic & Professional Tax , ESIC etc applicable.
Chandrakant

12 % of employer contribution to PF cannot be clubbed with any other component of the salary.
What I understand from your question is that your management wants that the gross salary offerd to the employee should be the CTC of the employee and wants the 12% employer contribution to PF, to be adjusted from other components.
If thats your query then what I suggest is that you deduct the eqivalent amount from the special allowance part. That way the cost of the employee will remain same although his monthly take home salary will come down.
But that should not be done, it is unethical on the company's part
Regards,
KP

Hi Dipti,
PF is deducted on only Basic, not on any allwances of the CTC, this PF deduction of 12% is included in the ctc monthly(employees Contribution).

Hi Dipali, PF will be deducted from Basic wage of the employee and the same amount will be contributed by the employer but when you will prepare salary slip then only contribution by the employer will be shown. So, its totally different head from the rest of the allowances. Now, I think this would help you.
Thanks
Neha singh