Is My Company Being Unfair with PF Contributions? Seeking Advice on What to Do

Hi all,

I'm working with an organization where in PF, employer contribution is being given to a few employees only. PF is being calculated on CTC, and out of the 12% that is being deducted from our salaries, half is being shown as ours and another half is being shown as employer contribution in the returns. However, for a few employees who are close to management, only 6% is being deducted from their CTC, and the same amount is being contributed by the employer. For us, PF is being deducted on the total CTC, but in the returns, 50% of our salary is being shown as wages.

Is it correct to do this? Is the organization cheating us by doing this? I want to take action, but I don't know what to do. So, please, seniors, help me by telling me whether all of these practices are correct or not and what I can do in this regard.

Hi Sailaja!

I am unable to understand your question, but from what I gather, your answer is:

The employee contributes 12% of his/her basic salary, and the same amount is contributed by the employer. The employer's contribution of 12% of the basic salary is totally deposited in the provident fund account. Whereas, out of the employee's contribution of 12%, 3.67% is contributed to the provident fund, and 8.33% is deposited in the pension scheme.

If you think that your employer is showing indifference towards you compared to others, it may be their personal issue. However, you can lodge a complaint about the same with the PF office or the PF Commissioner.

Amiya

Collect all your 12-month salary slips for the year 2009-10. Jot down the basic salary earned by you every month. Note the PF contribution amount deducted from your salary each month. Calculate 8.33% of your earned basic and similarly work out 3.67% of your earned basic. You will have two totals: (1) 12% of your earned salary, (2) 8.33% of your earned salary, and (3) 3.67% of your earned salary. Verify these figures in your annual PF Slip, especially in the columns "Contribution during the year."

Check if the total of your Employees' contribution is 12% of the total basic wages/salary earned by you during the year. Similarly, in the Employer's contribution column, ensure the amount is 3.67% of the basic salary earned by you (employee). If the total of both amounts to 15.67%, there is no issue. However, if it is different, file a written complaint with the PF Office stating that you have noticed less PF Contribution compared to what was deducted, in your PF accumulation slip. When filing the complaint, avoid using words that imply distrust in your employer. The PF department will take appropriate action.

There would be some confusion for sure; just check as suggested by the forum members Sunil and Amiya. If any discrepancy is found, please inform the PF department at the earliest. Just shoot an email or meet the PF officer of your area personally to resolve this.

Dear Sailaja,

Find the calculation below. PF contribution is based on basic + DA. 12% from the employee's side and 12% from the employer's side, in which:

1. 8.33% is for family pension
2. 3.67% is for PF
3. 1.10% is for EDLIS
4. 0.50% is for administrative charges for EDLIS
5. 1% is for administrative charges.

Likewise, 25% is the total contribution from both sides for PF. If you find that management is showing partiality to some employees, you can raise a written complaint at your state PF office. But remember, you will need sufficient proof for that.

Good luck!

Thanks for the response. In our organization, they do not provide us with pay slips. Apart from the employees who receive employer contributions in their PF accounts, nobody knows about the employer PF contribution in our organization. In the PF statement that they submit, the organization shows that PF is deducted from our basic, which is 50% of our salary. However, in reality, they deduct it from our CTC. Additionally, if I decide to file a complaint while still working here, it could potentially harm my career. Therefore, I am considering that aspect as well.

Understanding CTC and PF Contributions

In the CTC regime, both employee and employer contributions are shown in the CTC. They will be deducted from your CTC and deposited with PF authorities. Different percentages for different people cannot be applied.