Confused About My Salary and PF Contributions – Am I Missing Something Here?

My concern is that in my salary slip, my CTC is 25500, my gross is 24000, and PF contribution is 1512 of the basic salary of 12600. However, the company is only paying me 22500. When I inquired about this, they informed me that 3000 is being saved in the PF account. I am unsure about the employer's contribution. Please help me understand what I should do.

Salary Breakup:

Monthly
Basic: 12600
HRA: 5000
Conveyance: 1600
Medical Reimbursement: 1250
Special Allowances: 3550
Monthly Gross: 24000
P.F.: 1512
ESI: 0
CTC: 25512

Do not confuse CTC with the salary in hand. Your gross is 24000, deduct your PF of 1512, which makes it 22500 (approx.). Check your PF slip to verify the amount credited to your PF account. Review the contributions on both the employer's and employees' sides. The figures you have provided do not indicate whether the employer's contribution to EPF is deducted from your salary. If in doubt, seek clarification from your Accounts department.

Dear Aman,

Please find the below-mentioned worksheet based on the data available to you.

Employee Part

Basic 12600
HRA 5000
Conveyance 1600
Medical 1250
Spl Allowance 3550
Total Gross 24000

Deduction Part

PF Employee 1512
Take Home Salary 22488

Employee Part

Basic 12600
HRA 5000
Conveyance 1600
Medical 1250
Spl Allowance 3550
Total Gross 24000

PF Employer 1512
CTC 25512

It seems both the employer and employees' share is considered while fixing the CTC. Please check www.labourlawhub.com for more information.

Mr. Amanali,

Your company is following the CTC concept, which is why the employer will deduct both the PF amounts, i.e., both employee and employer PF.

As you mentioned, the present basic is 12600, so the deduction will be as follows:
PF = 12600 * 24% = 3024

Please let me know if you need any further clarification or assistance.

Dear Amanali, Your CTC is 25,512. Gross Salary + Employer PF = CTC (in your case). From your Gross Salary of 24,000, Employee PF will be deducted, i.e., 1,512. So, your Net/Take Home Salary is 22,488. As your management has informed, Employee + Employer Contributions will be in the PF & Pension account - 3,024/-.

Understanding CTC and Salary Components

CTC stands for Cost to Company, and you can consider your salary as Gross Salary. I hope this clarifies things. If you still have any queries, please let me know.

Thanks & Regards,

T. Prathap Senior Executive-HR Narayana Health, Bangalore [Phone Number Removed For Privacy Reasons]

Dear Mr. Ali,

Your gross salary is correct. PF @12% on Rs. 12,600, i.e., Rs. 1,512 recovered from your salary, is also deposited together with the employer's share by your employer, which you can also check.

SALARY SLIP IS PROOF THAT SHOWS YOUR EARNINGS AND DEDUCTIONS ONLY

Regards,
RDS Yadav
DIRECTOR,
NAVTARANGHRS@GMAIL.COM

Understanding CTC and EPF Eligibility

You should know the meaning of CTC first. CTC means "Cost to the Company," which refers to the cost or expenses that the company incurs for you. I assume that during the salary discussion, the HR department might have informed you about your compensation as CTC.

If your basic salary is more than 6,500, you are not eligible for EPF. It is entirely at the employer's discretion to provide you with EPF if you opt for it. If you do not need savings, tax benefits, or retirement benefits, you can opt out of EPF by expressing your concern and filling out Form 11. (Read carefully the EPF opt-out rules.)

Regards

Understanding Your Salary Components

Your CTC is 25,512, which includes deductions for PF for both the employer and employee. As you know, PF is calculated on the basic salary (including DA, if any). So, PF = 12,600 * 12%, which comes to Rs 1,512. This PF contribution is part of your gross salary.

To calculate the in-hand salary, use the formula: GROSS SALARY - DEDUCTIONS (PF, ESI Employee Contribution). Therefore, your in-hand salary comes out to be approximately Rs 22,500. The employer's contribution of 12% to PF and pension is part of the CTC.

Hope I was able to resolve your issue.

Thanks & Regards,

Tanya Bajaj.

Dear Sir,

Please go through your salary break-up:

Basic Salary: $12,600
Allowances: $11,400
Gross Salary: $24,000

Employee EPF @ 12%: $1,512 (Deduction)
Take Home: $22,488

Employer Contribution @ 13.36%: $1,683.36
Total CTC: $25,683.36

Total Monthly EPF Saving: $3,195.36

Thank you.

Dear Amnali,

As per your statement, the company's part is very correct. The total CTC is only Rs. 25,000, including the management's contribution. They have not deducted their contribution from your salary.

Dear Amanali,

CTS stands for Cost to Company. Each and every component (excluding variables like incentives) of your salary will be counted under the CTC. Go through your Offer Letter, there must be a break-up of Employer and Employee share of PF. Hence, the Employer's share of PF also comes under CTC. Take your PF number from your HR and you can crosscheck the amount in EPFO India.