In India, the Cost to Company (CTC) includes various components such as Basic Salary, House Rent Allowance (HRA), Provident Fund (PF), and other allowances. When it comes to PF deduction, both the employee and the employer contribute a specific percentage of the employee's Basic Salary towards the Provident Fund.
Here's a breakdown of the PF contribution for employees and employers:
- Employee Contribution: The employee contributes 12% of their Basic Salary towards the PF account.
- Employer Contribution: The employer also contributes 12% of the employee's Basic Salary towards the PF account. Out of the employer's contribution, 3.67% goes towards the Employee Provident Fund (EPF), 8.33% goes towards the Employee Pension Scheme (EPS), and 0.5% goes towards the Employee Deposit Linked Insurance (EDLI) scheme.
It's important to note that the total contribution towards PF is 24% of the employee's Basic Salary, with an equal split between the employee and the employer. This contribution is mandatory for all eligible employees as per the regulations outlined in the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
For a comprehensive understanding of the CTC breakup and PF deduction, it's advisable to refer to the specific company policies and the official guidelines provided by the Employee Provident Fund Organization (EPFO) in India.