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.
Regards
From India, Mumbai
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2Regards
From India, Mumbai
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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
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From India, Mumbai
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Dear All, Here is attached file for PF amendments which may be useful to everyone.
From India, Mumbai
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From India, Mumbai
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which PF notification is being referred that prescribes 55%-60% Basic salary in CTC ?
From Australia
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From Australia
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Potential Changes in Labor Legislation
It appears that a lot of changes may be brought about in 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 a Basic Salary of 50% or less of CTC. Though there is no legislation on how much the Basic salary should be as a percentage of CTC, the above could indicate the probability of legislation coming about in the future. Keeping the Basic salary above 51% of CTC should be fine.
Regards,
Raana Jitendra Pratap Singh
Head HR, Girnar Software Pvt Ltd
From India, New Delhi
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It appears that a lot of changes may be brought about in 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 a Basic Salary of 50% or less of CTC. Though there is no legislation on how much the Basic salary should be as a percentage of CTC, the above could indicate the probability of legislation coming about in the future. Keeping the Basic salary above 51% of CTC should be fine.
Regards,
Raana Jitendra Pratap Singh
Head HR, Girnar Software Pvt Ltd
From India, New Delhi
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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
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Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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There is no specific percentage of basic, etc., for PF. However, there is 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
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Regards, PBS KUAR
From India, Kakinada
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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
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From United States, Cedar Knolls
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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
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From India, Chennai
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There is no 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
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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
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CTC SALARY SLIP FORM.xls