Confused About PF Deductions: Is It 24% or 25% from Employee CTC in India?

Dear Team,

The total challan paid in the PF department is 25% (Employee 12% & Employer 13%).

PF Employee contribution is 12%, and PF Employer Contribution is 12%, both are deducted from employees' CTC. But do the 1% ADM and EDLI charges also deduct from employees' CTC?

So please let me know whether the total deduction is 25% from employees' CTC or if 24% is deducted from employees' CTC?

Location: New Delhi, India

Tags: PF employer, PF contribution, employer contribution, Country-India, City-India-New-Delhi

In the context of Provident Fund (PF) contributions in India, the total deduction from employees' Cost to Company (CTC) should actually be 24%, not 25%. Here's a breakdown of the components:

- PF Employee contribution: 12%
- PF Employer contribution: 12%
- Additional charges (1%): These are typically not deducted from employees' CTC. The 1% towards Administrative charges (ADM) and Employee Deposit Linked Insurance (EDLI) are usually borne by the employer as part of their contribution.

Therefore, if the total challan paid in the PF department shows a 25% contribution (Employee 12% & Employer 13%), it is important to ensure that the 1% ADM and EDLI charges are not being deducted from the employees' CTC. Employees should only have 12% deducted from their CTC towards PF contribution.

It's advisable to review the payslips and detailed breakdown of deductions to confirm that the 1% charges are not impacting the employees' CTC incorrectly. If there are discrepancies, it may be necessary to clarify this with the payroll or HR department to ensure accurate deductions and compliance with PF regulations in India.