Is Your Employer Deducting Both PF Contributions from Your Salary? Let's Discuss!

Is it acceptable if the employer is deducting PF contributions of both the employee and employer from the employee's salary?

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It is important to ensure that deductions are made correctly and in compliance with labor laws. In this case, the practice of deducting both the employee's and employer's PF contributions from the employee's salary may not be in line with standard procedures. It is recommended to verify this deduction process with the relevant HR policies and legal regulations to ensure it is being done correctly.

If the employer's PF contribution is mentioned in the CTC breakup, then it's completely acceptable. If not, please provide us with your entire salary breakup to guide you further.

Regards,
Manish

Hi,

Legally, it is not allowed to deduct PF contributions from both sides from the employee's salary.

Thank you.

But, employer's EPF contribution is mentioned in CTC breakup, then it's completely acceptable.

Bharath B.
Sr. HR Executive

What if the employer's part of contribution is mentioned not as a deduction but as a cost to the company, and only the employee's contribution is noted as a deduction? Is the employer's contribution deducted from the employer's salary?

Please help me with this.

Regards, Shraddha

Hello Shraddha,

The employer's part of PF contribution is part of the cost to the company, and it is mentioned in the CTC breakup. The employee's part of the contribution will be mentioned in the gross salary. Gross Salary is what the employee earns for payable days for the month, and CTC is what the company bears for that employee.

Regards,
Manish

Hi Shraddha,

For EPF, the Employee Contribution is 12%, and the Employer Contribution is 13.15%. For ESIC, the Employee Contribution is 1.75%, and the Employer Contribution is 4.75%.

You can show the Employee's contributions like this: EPF 12%, ESIC 1.75% (only the cost-cutting by the Basic).

Then, for Employer Contribution, you can include it in the Company's costs and pay according to their number of working days.

Regards,
Bharath B
Sr. HR Executive
9884930240

Dear members,

Let me explain the matter in detail. All the above comments can be true; that depends on what the gross payable salary is considered by the employer. The CTC sheet is generally split into two parts:

1 - Month Payable Salary (Containing all payable emoluments like Basic, DA, HRA, Allowances, Incentives, etc., of which only deductions are made like PF, ESI, PT, Absent days, advance, etc.).

2 - Gross Salary (containing employer's contributions towards PF, ESI, PT, Annual Bonus, etc.).

While processing the salary, if No. 1 salary is considered, then employer PF contribution should not be deducted. However, if the gross salary is processed as per No. 2, then employer PF Contribution can be deducted. I would like to give the proper breakup of your CTC and details of your monthly salary so that fellow members can provide correct and desirable comments on it.