Is Your Company Deducting Your Salary for Their PF Contribution? What Can You Do?

Our company doesn't contribute its share towards the PF; rather, it deducts the same from our salary and shows it as the employer's contribution. So, I contribute both parts from my salary. When questioned, they said that it's there in our offer letter. Please guide me on what to do.

The employer should not deduct the employer's share of PF (13.61%) from employees. It is a criminal offense under the act. You may report this to the PF authorities.

I agree with @Hrkpati. There are two methods that are usually followed by employers:

1. Employer tells you only what your monthly salary is, i.e., your gross salary.
2. Another one is the most popular method among employers, where they calculate all expenses that they pay for you and against you, showing that this is your CTC. For example, if your salary is Rs. 15000, then your CTC will be around Rs. 16790.00. How?

- Salary: Rs. 15000.00
- Employer PF Contribution @12% on basic (i.e., 60% of your gross salary) is Rs. 1080.00
- Employer ESIC Contribution @4.75% of your gross salary is Rs. 712.5

Now, 15000 + 1080 + 712.5 = Rs. 16792.00

In that case, your cash in hand range is Rs. 13652 after the deduction of PF and ESIC contributions at the employee's part. So always take a look before joining or accepting an offer letter to see whether they are asking for your CTC or your salary.

Thanks