Is It Fair for Employers to Make Employees Cover the Entire EPF Contribution?

PF Contribution Responsibilities

PF contribution should be from both parties (employer & employee). Is the company liable to ask the employee to contribute the whole amount from the employee's pocket for EPF? In such a case, the company is not paying any amount towards the employee's PF. Please advise.

Thanks,
Arockia

Hi Arockia! All deductions and benefits depend on the design of your salary. If the salary is stated as CTC (Cost to Company), contributions and deductions will be made from your CTC. If the salary is stated as Gross Salary, then both parties have to contribute their own parts.

Hope you will understand what you wanted to know.

Employers' PF contribution is a cost to the company, whereas Employees' PF will always be deducted from his/her salary. This way of showing the employers' contribution and including it in the CTC is not actually correct according to statutory acts. Essentially, the employers' contribution to PF is deducted from the gross salary, resulting in the net salary.

Thank you.

Regards

Thank you for your prompt response. Sharma, please clarify more on " 'if salary is stated as CTC (Cost to Company), contributions and deductions will be made from your CTC' . (In such a case, the salary component is stated as CTC).

Thanks,
Arockia

I sincerely appreciate your time. However, I still have a little confusion about why it has not been contributed by the management when it is structured as CTC, and why it has been contributed when it comes as Gross.

Thank you,

Regards,
Arockia