Confused About PF Deduction: Why Is It Taken Twice in My Salary Breakup?

Hi, I am very confused regarding PF calculation. As I know, 12% is deducted from the basic salary from the employee. However, I have received a salary breakup where 12% is deducted from the basic salary as well in a particular calculation. I have also attached a photo for reference. Kindly clear my doubt.

Salary Breakup as per My Knowledge

As per my knowledge, the salary breakup should be:

16085 CTC
- 12000 Basic pay
- 1685 Special Allowance
- 458 Gratuity
- 500 Medical
- 1440 PF
- 200 PT
13,485 take-home

Salary Breakup Received

But they have done:

16085 CTC
- 12000 Basic pay
- 1685 Special Allowance
- 458 Gratuity
- 500 Medical
- 1440 PF
- 200 PT
Deduction
Gross 13685
- 1440 PF
- 200 PT
12,045 take-home

PF Deduction Confusion

Why did they deduct PF twice? I thought one is the employee's side, and the other is the employer's side, but usually, the employer's side will not be deducted from the salary breakup. It will never show in the breakup. I would appreciate it if you could reply to this message.

Understanding Gross Wages and CTC

The confusion arises from a misunderstanding of "Gross Wages" and "CTC" concepts. The take-home salary is the difference between "Gross Wages" and "Various Deductions" (like PF, ESI, PT, etc.). However, in CTC, other components are also added to the Gross Wages, which the employer pays for the employee (like Employer PF-ESI Contributions, Annual Bonus, Medical, Gratuity, etc.). The employee does not receive these amounts in cash, as they are paid by the employer and hence included in the CTC.

Clarifying the Calculation

Now, regarding your calculation: In your case, the Gross Wages are 13,685 (12,000 + 1,685), from which Rs. 1,640 (PF-1,440 + PT-200) is deducted, resulting in a take-home salary of Rs. 12,045. That is correct.

Your CTC is Gross Wages-13,685 plus Other Benefits 2,398 (458 + 500 + 1,440) = 16,083. The other salary slip is just showing Gross Salary, deduction, and Take Home salary. Hence, PF is deducted only once.

I hope the matter is clear now. Fellow members can provide more insights on the topic.

First Payslip will not be accepted by any statutory authority. The second one is perfectly okay. CTC has no legal standing. It is a tool for management to control/understand the cost per employee. Legal payslip has nothing to do with CTC. It should only show the earning side of monthly gross and deduction side - PF, ESI, PTAX, etc.

S K Bandyopadhyay (WB, Howrah)

Email: skb@usdhrs.in