Employer PF and ESIC Contributions: Can They Be Included in Appointment Letters?

Employer's PF and ESIC Contributions in Appointment Letters

Can we show the employer's PF and ESIC contributions in the appointment letter of an employee? If not, how can we document it and finalize the CTC of an employee, which will include the PF and ESIC employer contributions?

Regards,
Deepak Pawar

Yes, you can include these details in the appointment letter. Most companies include the company's PF and ESI contributions in the CTC of the employees.

For Further Reading:

- [White Eagle: ESI: On which components contribution is payable](http://kuldeeprathore.blogspot.com/2009/11/esi-on-which-compontens-contribution-is.html)
- [White Eagle: Provident fund and Overtime Allowances](http://kuldeeprathore.blogspot.com/2009/11/whether-provident-fund-can-be-deducted.html)

Employer PF and ESI contributions form a part of an employee's CTC. Generally, they are shown on the salary annexure.

But how does it reflect on the salary slip? The employee may get confused if we do not mention the PF and ESI deductions, which will be made from their CTC (both sides).

You can prepare your salary annexure showing the salary components along with PF, ESI, LTA, Medical Insurance, and other benefits provided by your organization.

Additional Columns in Payslip

You may add two extra columns for employer PF and ESI contributions in your payslip format.

Regards

I'm not sure about ESI, but regarding PF, here it is:

Monthly Components

1. Basic Salary
2. House Rental Allowance
3. Special Allowance
4. Conveyance Allowance
5. Telephone/Internet Allowance
6. Food Allowance
_________________________
Gross Salary
_________________________

Quarterly Components

1. PF (Employer contribution)
2. Bonus
3. Leave Travel Allowance
4. Project Allowance
5. Medical Allowance
_____________________

Total Cost to Company (CTC)
_____________________

I hope this addresses your query. Please check the ESI part for clarification.

I have formulated the salary structure where I work, which includes all PF and ESIC deductions shown in the salary structure as CTC. The CTC amount is different, the gross salary is different, and the net amount is different.

Thank you.

Regards

Thank you for the reply. The information shared by you is really helpful. If anybody else has any other information to share, I would be very thankful.

Regards,
Deepak Pawar