Understanding PF, PPF, and EPF: How Does Employer Contribution Affect Your CTC?

Good afternoon everyone!

I am Shylaja. I need some information about Provident Funds. Please let me know the basic difference between PF, PPF, and EPF. I understand the PF component includes contributions from the employee and the employer. Can the employer's share be reflected or included in the CTC of an employee? If so, how?

Request immediate help on this, please.

Regards,
Shy

Hi, please go through the Provident Fund organization's website, and you will get the details. Yes, PF is included in CTC, and some companies include admin charges (1.1%), EDLI (0.5%), and inspection charges (0.01%), totaling 13.61%.

Shanmugam

The difference is as follows:

GPF - General Provident Fund, which is for Government Employees.

PPF - Individuals can save up to a maximum of Rs. 60,000 in a year in the account. The account can be maintained in a Post Office.

EPF - Employees' Provident Fund for the private sector, where 12% of the employees' share and 12% of the employer's share of the Basic Salary + DA are deducted and remitted to PF Authorities.

Good morning everybody!

Thank you both for the information provided. Just one other clarification regarding the employer's contribution (EPF) of 12%. Can this contribution be included as a part of the CTC? Please reply.

Regards,
Shylaja

EPF/PF: Employee Provident Fund (provident fund) is a retirement benefit scheme that is available to salaried employees. A stipulated amount (currently 12%) is deducted from the employee's salary and contributed towards the fund. The employer also contributes an equal amount to the fund which is divided into 2 parts:

A. Pension Fund - Employers' share 8.33% of Basic Pay.

B. Provident Fund - Employers' share 3.67% of Basic Pay.

(Simple Interest of 8% per annum is applicable on Employee's contribution and Employers' Contribution of 3.67%)

(If an employee holds a PF account for 10+ years under the same company with the same employee code, then he/she can claim for pension thereafter or can withdraw the amount of the Pension fund before 10 years, but no interest is applicable to the amount).

PPF: The Public Provident Fund has been established by the central government. You can voluntarily decide to open one. The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 70,000.

ESI: Is calculated on employees' GROSS salary; it also includes Incentives, NFH (National Festival Holidays), and other Allowances. Both Employer (4.75%) and Employee (1.75%) must contribute to ESI Pay on Employee Gross Salary.

(Please let me know if I'm wrong anywhere)