Dear All, Good Morning, I have joined a new company and have reviewed the available appointment letters of the previous employees. The structure outlined in the old employee's appointment letter includes the following components:
- Basic
- HRA
- Conveyance
- Special Allowance
- Emp. PF
- Total
Queries regarding salary structure
I have a few queries regarding this structure:
1) Is Employee PF included in the gross salary?
2) What is the actual gross salary?
3) Should the Employee PF be deducted or not?
Employer contributions
In general, my practice is that the Employer PF and ESIC contributions should be covered by the employer. I would appreciate guidance on the above queries.
Regards, Prasad Apte [Phone Number Removed For Privacy-Reasons].
From India, Mumbai
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- Basic
- HRA
- Conveyance
- Special Allowance
- Emp. PF
- Total
Queries regarding salary structure
I have a few queries regarding this structure:
1) Is Employee PF included in the gross salary?
2) What is the actual gross salary?
3) Should the Employee PF be deducted or not?
Employer contributions
In general, my practice is that the Employer PF and ESIC contributions should be covered by the employer. I would appreciate guidance on the above queries.
Regards, Prasad Apte [Phone Number Removed For Privacy-Reasons].
From India, Mumbai
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Employer's Contributions to EPF and ESI
Employer's contributions to EPF and ESI are not part of the gross salary but can be listed below the gross salary as part of the Cost To Company (CTC). From the gross salary, the employee's share of ESI and EPF shall be deducted to arrive at the net (take-home) salary.
From India, Kannur
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4526Employer's contributions to EPF and ESI are not part of the gross salary but can be listed below the gross salary as part of the Cost To Company (CTC). From the gross salary, the employee's share of ESI and EPF shall be deducted to arrive at the net (take-home) salary.
From India, Kannur
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Understanding PF Contribution and Gross Salary
PF contribution does not form part of Gross Salary because it is not an earning; it is a deduction made at a given rate from the Gross Salary calculated on "Pay" components of Gross Salary. However, it is considered in CTC because, in some industries, the employer also contributes an equal share of PF as deducted from the employee, whereas in some, PF is contributed by the employer with no deduction made from the employee. In some cases, part is deducted from the employee, and part is contributed by the employer.
Difference Between Gross Salary and Pay
"Gross Salary" and "Pay" are two different terms. Gross Salary includes Basic + Dearness Allowance (D.A.), HRA, and other allowances, if any. Whereas "Pay" includes only Basic Pay and D.A.
Regards,
AK Jain Retired Manager (HR) CPSU
From India, New+Delhi
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PF contribution does not form part of Gross Salary because it is not an earning; it is a deduction made at a given rate from the Gross Salary calculated on "Pay" components of Gross Salary. However, it is considered in CTC because, in some industries, the employer also contributes an equal share of PF as deducted from the employee, whereas in some, PF is contributed by the employer with no deduction made from the employee. In some cases, part is deducted from the employee, and part is contributed by the employer.
Difference Between Gross Salary and Pay
"Gross Salary" and "Pay" are two different terms. Gross Salary includes Basic + Dearness Allowance (D.A.), HRA, and other allowances, if any. Whereas "Pay" includes only Basic Pay and D.A.
Regards,
AK Jain Retired Manager (HR) CPSU
From India, New+Delhi
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(Fact Checked)-Your explanation is correct. PF doesn't form part of Gross Salary, it's a deduction. 'Pay' covers only Basic pay and D.A. Keep contributing such valuable insights. (1 Acknowledge point)
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Provident Fund - Excluded Employee - Definition.pdf
GROSS SALARY&CTC FOR 15500.xls
CiteHR.AI
(Fact Checked)-Your explanation is correct. Employer's contributions to EPF and ESI are part of CTC, not gross salary. Employee's share is deducted from gross to calculate net salary. (1 Acknowledge point)