Confused About PF Deductions: Is It Based on Gross or Net Salary? Can Anyone Clarify?

In gross salary, is the PF employee contribution based on the gross salary or the net salary? For example, my gross salary per annum is 300,000/-, which equates to 25,000/- per month. However, in my salary slip, the gross salary is shown as 24,100/- per month, with deductions for PF-900 and P.T-200, resulting in a net salary of 23,100. Can anybody explain this situation?

In gross salary, will the PF employee contribution be on the gross salary or the net salary? For example, my gross salary per annum is 300,000/-, which amounts to 25,000/- per month. However, in my salary slip, the gross salary is shown as 24,100/- per month with PF deductions of 900, P.T-200, and a net salary of 23,100. Can anybody explain this discrepancy?

Please explain your basic salary because PF deductions are based on the basic salary.

Please review your salary slip again as there are some details you may have overlooked. You mentioned that your net salary is Rs. 23,100 after deductions of Rs. 900 (PF) and Rs. 200 (PT), indicating a total gross salary of Rs. 24,200. However, you noted it as Rs. 24,100, which seems to be incorrect.

Breakdown of Your Actual Salary

- Rs. 7,500: Basic (Monthly)
- Rs. 3,750: HRA
- Rs. 200: PT (as mentioned)
- Rs. 4,000: Other Allowances
- Total Gross (A): Rs. 15,450 (or 70% of Monthly Gross Rs. 17,500)

Without reimbursements or other components, the total is Rs. 9,550 (or Rs. 7,500).

Reimbursements

- Rs. 1,250: Medical
- Rs. 800: Conveyance
- Rs. 5,450: Entertainment and Other (or Rs. 7,500)

Total Gross (B): Rs. 9,550 (or Rs. 7,500)

Combining A and B gives:
- Rs. 15,450 + Rs. 9,550 = Rs. 25,000
or
- Rs. 17,500 + Rs. 7,500 = Rs. 25,000

Therefore, your Total Monthly Gross is Rs. 25,000 (as previously mentioned).

Deductions

- Rs. 900 (EPF)
- Rs. 1,000 (Other, which needs verification from your salary slip or HR Department)

Total Deduction: Rs. 1,900

Hence, your total net take-home salary is Rs. 23,100.

Calculation

Total Monthly Gross - Total Deductions
Rs. 25,000 - Rs. 1,900 = Rs. 23,100

Please ensure to verify these details in your salary slip for accurate information.

In gross salary, is the PF Employee contribution calculated on the gross salary or the net salary? For example, my gross salary per annum is Rs. 300,000, which equates to Rs. 25,000 per month. However, on my salary slip, the gross salary is listed as Rs. 24,100 per month, with PF deductions of Rs. 900, P.T. deductions of Rs. 200, and a net salary of Rs. 23,100. Can someone please explain this discrepancy?

Explanation of Salary Components

As per your query, your Salary (CTC) is Rs. 25,000, with a basic pay of Rs. 7,500. Therefore, the 12% PF contribution on your Basic amounts to Rs. 900. After deducting the PF Contribution (Employer), your Gross Salary will be Rs. 24,100. Subsequently, after deducting your PF Contribution and PT, your net salary will be Rs. 23,000.

If your monthly gross is Rs. 25,000, but your salary slip shows the gross as Rs. 24,100, then the employer contribution of EPF may be deducted from your gross salary. Also, your net salary is Rs. 23,000 and not Rs. 23,100. Please check once again.

Regards,

I think you have not seen your salary slip properly. The amount you have mentioned, i.e., Rs.3,00,000 per annum as Gross salary, is actually CTC (Cost To Company). The amount you have mentioned, i.e., Rs.900 per month as the deduction of PF, may be incorrect. It should not exceed Rs.885 per month if you are not contributing more voluntarily. The limit to contribute to PF is Rs.6,500 maximum.

Regards