Provident Fund Query - Start Up

Dear All,
I am working as an HR executive in a new start up company. They have started deducting PF. But they are deducting pf on CTC which is creating a problem as maximum salary gets deducted. like suppose my CTC is 20,000 they are deducting 1200 as my contribution and 1316 as company's contribution from my CTC only. can they do this??

Hi,
As per my knowledge it should not be like that. PF has to be 12% on basic and should not exceed 780/-.
I think i am not wrong.

Dear
Your company is deducting more than as per the EPF rules, they have deduct 780 and contribution by the Employer also 780+Admin charges
Need clarification pl contact
9866917232
Lakshminaryana

As per Employee Provident Scheme, PF contribution is done on earned Basic+ DA and the rate of contribution is 12%.
Regards,
Suresh

It is not proper to deduct P.F on CTC. As per Sec.6 of the P.F Act the contribution has to be deducted on Basic wages + DA + retaining allowance, if any paid + cash value of food concession,if any, subject to the maximum of Rs.6500/-p.m.
B.Saikumar
HR & LabourLaw Advsior
Mumbai

Dear All,

I feel the queriest has not correctly presented his query. What I understood from the post is, the queriest is getting less money in his hand than what is agreed in CTC. There is a deduction of Employee share 12% and Employee share 13.61% from CTC.

My questions to queriest are as under:

1. Is the employers share considered as cost in CTC structure?

2. Is the deductions towards PF started by company at later stage on coverage and this PF component was not considered in CTC?

CTC is the cost to company on employee. Whatever amount spent by company, company can take it in CTC as cost to it (company). Company can take PF employer share in CTC component. Many companies, I have seen, even take costs towards leave, gratuity premium etc. in CTC component and according to me they (companies) are not wrong.

HR Professionals should first understand this concept of CTC and have transparency in telling this to the new entrants at the time of deciding the package deal of them.

I move around many Corporates where I see the HR Professionals are not understand this concept and they fail to convince it to employees obviously.

No company can make deduction from your salary towards employers share / cost. But it is like the bottle is half empty.

I hope the viewers / readers of this post of mine will understand my views properly. If not,(I further hope) atleast they will not doubt on my caliber as it is done in other thread very recently.