Understanding P.F Deductions: Are Both Employee and Employer Contributions Correctly Deducted?

Clarification on P.F Deductions

P.F deductions are ongoing with a PF account number. Additionally, both P.F Employee and PF employer contributions are deducted by the employee. Is this correct? Please advise.

P.F. Deductions Without Account Number

P.F. deductions are being made without a P.F. account number. Additionally, both P.F. contributions from the employee and the employer are being deducted by the employee. Is this correct? Please advise.

Both the employee and the employer contribute partially to the employee's PF account.

Your question is not clear regarding what you want to know. Please describe the scenario to make the question clearer so that seniors can help you. Do you want to know if the PF contribution of the employee and employer deducted from the employee's salary is correct or not? If this is your question, then please check the employee's appointment letter, CTC, and company policy. Please reply if further clarification is required.

Regards

We have never seen a PF account number on our salary slip. Now, tell me what to do next. Can we take legal action against the company?

I joined a company, and the process started in May 2013. Management informed us that there would be no deductions and our salary would be intact. However, a couple of months passed, and in September 2013, management approached us with a PF plan. We assumed that, like other companies, this company would also contribute to the employee's PF. To our surprise, when we saw the payslip for October 2013, we were shocked to see that PF employee, PF employer, ESI employee, and ESI employer contributions were deducted from CTC.

In September, we received a mail informing us that we would see the PF account number in the next month's salary slip. However, we have yet to see the PF account number.

What can be done? Feeling disheartened.

Regards

It is illegal to deduct both the Employee and Employer parts of ESI and EPF from the salary of the employee. You and other employees should raise your voices against it. The Employee Part of EPF (12% of Basic + DA) and ESI (1.75% of Gross Salary) can only be deducted from the employee's salary. If your employer doesn’t change this system and return the deducted contributions, you can lodge a complaint with the Labour Commissioner.

Secondly, regarding your query about the PF account number not being mentioned in the salary slip, I believe it is crucial to confirm whether the deducted EPF and ESI have been submitted to the respective departments or not. Therefore, ask the management to provide you with the EPF Account Number and ESI IP Number promptly and share them with us here or through a message. I will try to assist you in this matter.

So, there is no need to worry; stay happy.

Will going legal solve your purpose? Upon receiving a notice, the employer may dismiss you. It is advisable to discuss with HR the implementation of including the PF Account No. on payslips. Most payroll software has this feature built-in; the only inconvenience is the data entry.

I would also advise that for minor issues, taking legal action may not yield results promptly, as the legal process also takes time. Finally, redirecting your energy towards constructive actions within the company may lead you to greater success.

Regards.

It totally depends on your offer letter. If they have mentioned your salary as CTC, then both contributions will be deducted from your salary.

I sense that you are working in a small company where, due to a smaller employee count, the company did not register for PF and ESI. Now, as the company has expanded its workforce, they have registered for PF & ESI.

Explanation of CTC

CTC stands for Cost To The Company, which indicates how much you cost the company.

CTC = Salary (Basic + DA + Conveyance + Medical and Others) + Employee PF contribution + Employer PF contribution + Employee ESI contribution + Employer ESI contribution.

If your CTC was the in-hand salary before the deduction of PF & ESI started, then it is acceptable if your employer deducts both the employee's and employer's shares from your Salary (meaning CTC).

Please review your Appointment Letter, Salary breakdowns, and CTC to see what is specified. It is possible that you may not have a clear understanding from the company's policy documents, particularly if the company is new, as I mentioned earlier.

In this case, I recommend having a meeting with HR or Management to understand the basis on which the company deducted PF & ESI contributions.

Additionally, since you mentioned not receiving a PF account number, I suggest asking for it during the meeting. If they are unable to provide your PF account number, request the Organization's account number.

If the company is registered with EPFO, it must have an account number. With the company's account number, you can check the EPFO website for the company's status and the names of employees for whom the company submitted PF contributions last month.

I believe the situation is not overly complex, and there is no need to pursue legal action at this time.

I do not recommend taking any legal steps before examining all the scenarios I have outlined above.

Please respond if further assistance is needed.

PF amount will be deducted from both the employee and employer—50% from the employee and 50% from the employer. Ask your HR about your PF number and check the status online. If your company is not providing a PF number and they are deducting 50% of the amount from your salary, then you can sue them.

Regards.