Dear All,
I have a query related to PF in the salary structure. The salary break is as follows:
Part A: Basic + HRA + LTA + Other Allowance + Medical + Other Components
Part B: PF (Employer Contribution) + ESIC (Employer Contribution)
Part C: PF (Employer Contribution @ 12%) + ESIC (Employee Contribution @ 1.5%) + TDS + Professional Tax + Group Insurance + Other Components
Now, CTC is: PART A + B - C, where A + B refers to Gross and A + B - C is Take-home.
Now, I am unable to understand whether in Part B PF and ESIC (both employer contributions) should be considered as 12% or 13.61% (12% + 0.5% + 1.1%) for PF and ESIC 5% (4.5% + 0.5%) to calculate CTC.
Kindly give suggestions.
Thanks in advance,
Regards,
Pradyumna
From India, Bangalore
Acknowledge(0)
Amend(0)
I have a query related to PF in the salary structure. The salary break is as follows:
Part A: Basic + HRA + LTA + Other Allowance + Medical + Other Components
Part B: PF (Employer Contribution) + ESIC (Employer Contribution)
Part C: PF (Employer Contribution @ 12%) + ESIC (Employee Contribution @ 1.5%) + TDS + Professional Tax + Group Insurance + Other Components
Now, CTC is: PART A + B - C, where A + B refers to Gross and A + B - C is Take-home.
Now, I am unable to understand whether in Part B PF and ESIC (both employer contributions) should be considered as 12% or 13.61% (12% + 0.5% + 1.1%) for PF and ESIC 5% (4.5% + 0.5%) to calculate CTC.
Kindly give suggestions.
Thanks in advance,
Regards,
Pradyumna
From India, Bangalore
Acknowledge(0)Amend(0)
Clarification on CTC Components
Part B will consist of CTC PF 12% Employer Share and ESIC 4.75% Employer Share. The cost of administration of the scheme, if any (PFR & ESIC), is not for any particular employee, so it can't be part of CTC for any employee.
Be clear.
Regards,
P K Mishra
From India
Acknowledge(0)Amend(0)
25Part B will consist of CTC PF 12% Employer Share and ESIC 4.75% Employer Share. The cost of administration of the scheme, if any (PFR & ESIC), is not for any particular employee, so it can't be part of CTC for any employee.
Be clear.
Regards,
P K Mishra
From India
Acknowledge(0)Amend(0)
Thank you for the solution. Could you please answer another question, "How is the basic fixed?" and a question pertaining to the above CTC structure - is the breakup correct in CTC?
Regards,
Pradyumna
From India, Bangalore
Acknowledge(0)Amend(0)
Regards,
Pradyumna
From India, Bangalore
Acknowledge(0)Amend(0)
CTC means cost to the company so all the costs that the employer has to bear in providing employment constitutes part of CTC. Hence in part B you should consider 13.61% for Pf and so on.
From United States, Cambridge
Acknowledge(0)Amend(0)
From United States, Cambridge
Acknowledge(0)Amend(0)
Hi,
Please, can anybody tell me if a company is managing its own PF account, which includes the whole employee's contribution (12%) and 3.67% of the employer's contribution, and the rest 8.33% of the employer's contribution is submitted to PF authorities. Is this procedure legally correct? If yes, then how will an employee receive their 8.33%?
Thank you.
From India, Kanpur
Acknowledge(0)Amend(0)
Please, can anybody tell me if a company is managing its own PF account, which includes the whole employee's contribution (12%) and 3.67% of the employer's contribution, and the rest 8.33% of the employer's contribution is submitted to PF authorities. Is this procedure legally correct? If yes, then how will an employee receive their 8.33%?
Thank you.
From India, Kanpur
Acknowledge(0)Amend(0)
Hello,
PF 12% & ESIC 4.75% are part of the CTC as both parts are contributed by the employer. The employer does not take administrative costs from the employee for PF. Secondly, the PF is divided into 2 parts, i.e., PF & Pension. In PF, {12% (Employee) + 3.67% (Employer) = 13.67%}, whereas in Pension, 8.33% (Employer) is submitted to every employee's account. At the time of withdrawal, PF authorities issue 2 separate cheques for both PF & Pension.
Furthermore, in some companies, LTA, Medical, Bonus, Personal Accident, Mediclaim & Gratuity costs are also part of CTC. As a standard practice, Basic constitutes 40% of the total CTC.
Thanks,
SG
From India, New Delhi
Acknowledge(0)Amend(0)
PF 12% & ESIC 4.75% are part of the CTC as both parts are contributed by the employer. The employer does not take administrative costs from the employee for PF. Secondly, the PF is divided into 2 parts, i.e., PF & Pension. In PF, {12% (Employee) + 3.67% (Employer) = 13.67%}, whereas in Pension, 8.33% (Employer) is submitted to every employee's account. At the time of withdrawal, PF authorities issue 2 separate cheques for both PF & Pension.
Furthermore, in some companies, LTA, Medical, Bonus, Personal Accident, Mediclaim & Gratuity costs are also part of CTC. As a standard practice, Basic constitutes 40% of the total CTC.
Thanks,
SG
From India, New Delhi
Acknowledge(0)Amend(0)
Hi,
We agree with Mr. NK Tiwari's arguments. Jyotsna, could you clarify whether the PF at your company is managed by a trust?
Thank you.
From India, Jaipur
Acknowledge(0)Amend(0)
We agree with Mr. NK Tiwari's arguments. Jyotsna, could you clarify whether the PF at your company is managed by a trust?
Thank you.
From India, Jaipur
Acknowledge(0)Amend(0)
Can anyone help me to clear my confusion on the above threads? As per my knowledge:
Gross Salary Calculation
Gross (Basic + HRA + LTA + Other Allowance + Medical + Other Components)
- Deduction (PF + TDS)
= Take-home
+ Company contribution (PF and any other)
= CTC.
Let me know if I am wrong.
Regards,
Rita
From India, Thana
Acknowledge(0)Amend(0)
Gross Salary Calculation
Gross (Basic + HRA + LTA + Other Allowance + Medical + Other Components)
- Deduction (PF + TDS)
= Take-home
+ Company contribution (PF and any other)
= CTC.
Let me know if I am wrong.
Regards,
Rita
From India, Thana
Acknowledge(0)Amend(0)
Dear Jyoti,
Yes, this procedure is legally right as the company is managing its own EPF trust in which 12% + 3.67% is kept with the employer, and the EPS share of 8.33% has to be deposited with EPFO. For withdrawal of the same, you have to simply fill Form 10C of EPS duly attested by the employer and submit the same to the concerned EPFO office.
Thanks & regards,
From,
Sumit Kumar Saxena,
+91-9899669071, 0120-4131277
From India, Ghaziabad
Acknowledge(0)Amend(0)
Yes, this procedure is legally right as the company is managing its own EPF trust in which 12% + 3.67% is kept with the employer, and the EPS share of 8.33% has to be deposited with EPFO. For withdrawal of the same, you have to simply fill Form 10C of EPS duly attested by the employer and submit the same to the concerned EPFO office.
Thanks & regards,
From,
Sumit Kumar Saxena,
+91-9899669071, 0120-4131277
From India, Ghaziabad
Acknowledge(0)Amend(0)
For the calculation of CTC, you have to consider 13.61% of EPF share and 4.75% of ESIC share. Please let me know what 0.5% in ESIC refers to.
Thanks & Regards,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]
From India, Ghaziabad
Acknowledge(0)Amend(0)
Thanks & Regards,
Sumit Kumar Saxena
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]
From India, Ghaziabad
Acknowledge(0)Amend(0)
Basic pay is fixed based on the following criteria:
1) Minimum wages
2) It should be on average 40% of Gross
3) It depends on company policy; mostly companies with fair practices have a grade-wise structure. If not, it can be fixed through negotiation in the case of a fresh appointment.
4) Basic pay should never be less than the prevailing minimum wages.
P K MISHRA
From India
Acknowledge(0)Amend(0)
1) Minimum wages
2) It should be on average 40% of Gross
3) It depends on company policy; mostly companies with fair practices have a grade-wise structure. If not, it can be fixed through negotiation in the case of a fresh appointment.
4) Basic pay should never be less than the prevailing minimum wages.
P K MISHRA
From India
Acknowledge(0)Amend(0)
Dear,
IT IS EASY.
PART A = GROSS SALARY.
PART A + PART B = COST TO THE COMPANY, WHERE THE EMPLOYEE GROSS SALARY COMPANY WILL CONTRIBUTE. SO, GROSS SALARY + EMPLOYER CONTRIBUTION = CTC.
PART A - PART C = EMPLOYEE TAKE-HOME SALARY, WHERE THE EMPLOYEE HAS TO CONTRIBUTE FOR PF AND ESIC. SO, OUT OF HIS GROSS SALARY, PF AND ESIC ARE DEDUCTED.
MITESH MAKWANA H.R. 9723511033
From India, Mumbai
Acknowledge(0)Amend(0)
IT IS EASY.
PART A = GROSS SALARY.
PART A + PART B = COST TO THE COMPANY, WHERE THE EMPLOYEE GROSS SALARY COMPANY WILL CONTRIBUTE. SO, GROSS SALARY + EMPLOYER CONTRIBUTION = CTC.
PART A - PART C = EMPLOYEE TAKE-HOME SALARY, WHERE THE EMPLOYEE HAS TO CONTRIBUTE FOR PF AND ESIC. SO, OUT OF HIS GROSS SALARY, PF AND ESIC ARE DEDUCTED.
MITESH MAKWANA H.R. 9723511033
From India, Mumbai
Acknowledge(0)Amend(0)
Dear IT IS EASY.
PART A = GROSS SALARY. PART A + PART B = COST TO THE COMPANY WHERE IN EMPLOYEE GROSS SALARY COMPANY WILL CONTRIBUTE. SO, GROSS SALARY + EMPLOYER CONTRIBUTION = CTC.
PART A - PART C = EMPLOYEE TAKE-HOME SALARY WHERE THE EMPLOYEE HAS TO CONTRIBUTE FOR PF AND ESIC, SO OUT OF HIS GROSS SALARY PF AND ESIC ARE DEDUCTED.
MITESH MAKWANA H.R. 9723511033
From India, Mumbai
Acknowledge(0)Amend(0)
PART A = GROSS SALARY. PART A + PART B = COST TO THE COMPANY WHERE IN EMPLOYEE GROSS SALARY COMPANY WILL CONTRIBUTE. SO, GROSS SALARY + EMPLOYER CONTRIBUTION = CTC.
PART A - PART C = EMPLOYEE TAKE-HOME SALARY WHERE THE EMPLOYEE HAS TO CONTRIBUTE FOR PF AND ESIC, SO OUT OF HIS GROSS SALARY PF AND ESIC ARE DEDUCTED.
MITESH MAKWANA H.R. 9723511033
From India, Mumbai
Acknowledge(0)Amend(0)
Salary Breakdown is as follows:
Part A: Basic + HRA + LTA + Other Allowances + Medical + Other Components
Part B: PF (Employer Contribution) + ESIC (Employer Contribution)
Part C: PF (Employee Contribution @ 12%) + ESIC (Employee Contribution @ 1.75%) + TDS + Professional Tax + Group Insurance + Other Components
PART A is ONLY GROSS SALARY
PART A + PART B = CTC
AND PART A - PART C = EMPLOYEE TAKE-HOME SALARY
FURTHERMORE, FOR PF CONTRIBUTION FROM THE EMPLOYER SIDE, IT IS 13.61%, AND FOR ESIC, IT IS 4.75%
Regards,
MITESH MAKWANA
From India, Mumbai
Acknowledge(0)Amend(0)
Part A: Basic + HRA + LTA + Other Allowances + Medical + Other Components
Part B: PF (Employer Contribution) + ESIC (Employer Contribution)
Part C: PF (Employee Contribution @ 12%) + ESIC (Employee Contribution @ 1.75%) + TDS + Professional Tax + Group Insurance + Other Components
PART A is ONLY GROSS SALARY
PART A + PART B = CTC
AND PART A - PART C = EMPLOYEE TAKE-HOME SALARY
FURTHERMORE, FOR PF CONTRIBUTION FROM THE EMPLOYER SIDE, IT IS 13.61%, AND FOR ESIC, IT IS 4.75%
Regards,
MITESH MAKWANA
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Employer-PF-res trict to wages of Rs 6500.pdf
CTC CALCULATION SHEET.xls