Dear All,

Since the latest limit for PF is Rs. 15,000, PF contributions stand at 12% of basic and DA. I am interested in understanding if there is a recommended percentage of basic salary to the overall Cost to Company (CTC). For instance, should the basic salary constitute 40% or 50% of the CTC? Your assistance on this matter would be greatly appreciated.

Please help.

From India, Mumbai
Acknowledge(0)
Amend(0)

As per PF notification, Basic should be 55% to 60%, not less than this. Pl make sure when you prepare CTC, basic should be in above criteria.
From India, Mumbai
Acknowledge(0)
Amend(0)

Dear Arpan Naik, Pl provide PF if any for basic fixation of 55 to 60% , or any citations from court to that effect, it will be useful fro our professionals
From India
Acknowledge(0)
Amend(0)

Dear All, Here is attached file for PF amendments which may be useful to everyone.
From India, Mumbai
Attached Files (Download Requires Membership)
File Type: pdf PF_New_Letter.pdf (10.9 KB, 561 views)

Acknowledge(0)
Amend(0)

Dear Sir, The attached information is our personal opinions , If have any official circular or any notification from PF dept or Govt we be more useful.
From India
Acknowledge(0)
Amend(0)

which PF notification is being referred that prescribes 55%-60% Basic salary in CTC ?
From Australia
Acknowledge(0)
Amend(0)

It appears that a lot of changes may be brought about in the labor legislations including ESI and others. I came across a PF directive in Rajasthan asking inspectors to compile a list of all who have deducted PF on Basic Salary of 50% or less of CTC. Though there is no legislation on how much the Basic salary should be as a % of CTC, the above could be indicative of the probability of legislation coming about in the future. Keeping Basic salary above 51% of CTC should be fine.

Raana Jitendra Pratap Singh Head HR, Girnar Software Pvt Ltd


From India, New Delhi
Acknowledge(0)
Amend(0)

There is no specific direction in the act that a certain percentage should be kept for basic salary, but bifurcation is done only on the basis of taxation liability. However, it is the accepted and factual view that the basic salary should not be less than the prescribed minimum wage of the state.

Thanks & Regards,

Sumit Kumar Saxena

From India, Ghaziabad
Acknowledge(0)
Amend(0)

Dear Mr. Arpan Ji,

There is no specific percentage of basic, etc., for PF. But there is only a notification stating, "Minimum Wages should not be split," i.e. (Basic + VDA) as notified by the appropriate Government.

Regards,
PBS KUAR


From India, Kakinada
Acknowledge(0)
Amend(0)

Dear Sir, I would like to know that as the ceiling has been increased from 6500/ to 15000/ is this applicable for all the states.
From United States, Cedar Knolls
Acknowledge(0)
Amend(0)

If an employee draws a salary of Rs.25000/- with no other allowances it is necessary to deduct pf or option to him / her to have pf ccount or not
From India, Chennai
Acknowledge(0)
Amend(0)

There is no such formal regulation imposing any specific percentage of Basic + DA in a Monthly PaySlip Gross Salary. However, at some places, PF Inspectors are insisting on such percentages ranging from 40% to 50%. It is a common practice adopted by many Employers and HR Managers to keep the Basic + DA at the lowest possible level compared to the rising monthly gross salary. The purpose is very simple: to minimize PF and other statutory liabilities (Gratuity, Bonus). If we view PF as a useful post-retirement benefit and a social security tool, then this mindset needs to change. I am sure PF and Government Authorities have taken notice of this, and regulations prescribing specific percentages of Basic + DA will become a reality sooner or later. Thanks.
From India, Pune
Acknowledge(0)
Amend(0)

Join Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.







Contact Us Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2025 CiteHR ®

All Copyright And Trademarks in Posts Held By Respective Owners.