Can employer deduct PF admin charges from offered CTC salary?

Dear Members,

I have a query regarding PF deduction.

My friend is working in startup MNC. His salary breakup is mentioned below-

Basic Salary - 15,998
HRA - 6,399
Conveyance allowances - 1,600
Medical allowances - 1,250
Special allowances - 10,304
Total Gross Salary- 35,550
PF contribution by employee - 1,800
Net Salary - 33,750

Employer PF contribution - 1,950
CTC - 37,500

In my understanding employee and employers side PF contribution rate is suppose to be 12%. But they are deducting it by 13%. (12% PF + 1% admin charges)

Is it right deduction or not?
Please suggest.

Hi,

Of late it has become common among IT sector to employer contribution PF to the CTC of the employee.

But recovering Admin charges also from employees is not ethical.

Salary processed by many organization from CTC. Employer portion of EPF is a part of CTC. Then the employer can deduct. It is nothing but addition to earning side and then deduction.

But the way the salary structure has been shown, it appears that the employer is wrongly deducting the Admin charge. It is illegal.

Please check in details and understand the situation properly.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
[Login to view]
USD HR Solutions – To Strive towards excellence with effort and integrity

Hello,
We are talking about CTC (Cost to Company) and it refers to the Total salary package of an employee. It is inclusive of all monthly components such as basic pay, reimbursements, various allowances, etc and all annual components such as gratuity, annual variable pay annual bonus etc.
This is a legal entity don't be confuse because if Employer has mentioned in salary breakup 12% and 13% then there's no problem.

I think all the partaining the salary components belongs to employees so my knowledge it can be valid but 1% is not PF admin charges, PF admin charges is 0.5% and another 0.5% EDLI charges. This is the Act.

Thank You