Just want one clarification...
Clarification on CTC and Employer Contributions
Is CTC meant to include the employer's contribution for PF/ESI, or should the employer pay separately from company accounts? Please give some suggestions on the same. I have come across one company where the PF/ESI contribution of the employer is being deducted from the employee's salary, i.e., from the employee's CTC.
Regards,
Yohan
From India, Mangaluru
Acknowledge(0)
Amend(0)
2Clarification on CTC and Employer Contributions
Is CTC meant to include the employer's contribution for PF/ESI, or should the employer pay separately from company accounts? Please give some suggestions on the same. I have come across one company where the PF/ESI contribution of the employer is being deducted from the employee's salary, i.e., from the employee's CTC.
Regards,
Yohan
From India, Mangaluru
Acknowledge(0)Amend(0)
The term CTC means Cost-to-Company. It varies from company to company based on their predefined salary structure. As per your query about whether CTC means that the employer's contribution for PF/ESI is also deducted in the said CTC or should the employer pay separately from company accounts, the answer is an employee should contribute 12% of their basic salary from their earnings, and the employer will also contribute 12% of that from their accounts.
Explanation of CTC Components
Basic - 10000
HRA - 4000
Medical Allowance - 550
Spl. Allowance - 1450
Conv. Allowance - 4000
Monthly Gross - 20000
PF - 1200
Bonus (Min) - 833
Gratuity - 481
Monthly CTC - 22514
Yearly CTC - 270168
Your deduction should be Monthly Gross - Your PF Contribution - P.Tax - (TDS based on annual income)
20000 - 1200 - 130 (Varies statewise) - (let TDS = 0)
Then your net pay = Rs.18670/-
Regards
From India, Calcutta
Acknowledge(0)Amend(0)
Explanation of CTC Components
Basic - 10000
HRA - 4000
Medical Allowance - 550
Spl. Allowance - 1450
Conv. Allowance - 4000
Monthly Gross - 20000
PF - 1200
Bonus (Min) - 833
Gratuity - 481
Monthly CTC - 22514
Yearly CTC - 270168
Your deduction should be Monthly Gross - Your PF Contribution - P.Tax - (TDS based on annual income)
20000 - 1200 - 130 (Varies statewise) - (let TDS = 0)
Then your net pay = Rs.18670/-
Regards
From India, Calcutta
Acknowledge(0)Amend(0)
Thanks Rahaman But i have seen one offer letter where the employer has shown the deduction of PF contribution from employee’s salary..!! is it legally right to do that??
From India, Mangaluru
Acknowledge(0)Amend(0)
From India, Mangaluru
Acknowledge(0)Amend(0)
Dear friend It is legally wrong. They should not recover the Employer contribution from the salary of the Employee. The Employer has to bear the employer contribution. Regards alphonse
From India, Madras
Acknowledge(0)Amend(0)
From India, Madras
Acknowledge(0)Amend(0)
If the company is offering a Gross salary, then the employer's contribution is borne by the company. However, if the company offers CTC, then the employer's contribution is part of the CTC offered to the employee.
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
I do agree with Alphonse. It is not legal or ethical for an employer to recover the employer contribution from the employee's salary. Please note, though you can contribute twice the PF (24%) from your salary with the approval of management, the employer contribution should remain at 12% or more at the discretion of the management.
Regards,
A. Rahaman
HRD
From India, Calcutta
Acknowledge(0)Amend(0)
Regards,
A. Rahaman
HRD
From India, Calcutta
Acknowledge(0)Amend(0)
I do agree with Neha. In my company, we are offering CTC (Cost to Company). It means both contributions will be borne by the employee. There is no legal issue in this as the salary structure is designed as per company policy.
Regards,
Suvarna
From India, Pune
Acknowledge(0)Amend(0)
Regards,
Suvarna
From India, Pune
Acknowledge(0)Amend(0)
As per my knowledge and experience, CTC itself indicates that the Cost to the Company includes every rupee spent by the company on an employee. It encompasses all contributions from both the employee and the employer. CTC clearly means:
Net + Employee contributions = Gross
Gross + Employer Contributions = CTC.
Regards,
Mallik
From India, Hyderabad
Acknowledge(0)Amend(0)
Net + Employee contributions = Gross
Gross + Employer Contributions = CTC.
Regards,
Mallik
From India, Hyderabad
Acknowledge(0)Amend(0)
As CTC means Cost to the Company. The company wont pay a rupee extra than the agreed CTC. All the Contributions are included in it.
From India, Lucknow
Acknowledge(0)Amend(0)
From India, Lucknow
Acknowledge(0)Amend(0)
PF Contribution Explained
PF contribution is 12% of the employee's basic salary.
For example: If the basic salary is ₹10,000, then the PF amount would be ₹1,200.
Understanding CTC Components
CTC includes the entire cost to the company. It includes both components, and these are mutually decided and agreed upon.
Regards
From India, Delhi
Acknowledge(0)Amend(0)
PF contribution is 12% of the employee's basic salary.
For example: If the basic salary is ₹10,000, then the PF amount would be ₹1,200.
Understanding CTC Components
CTC includes the entire cost to the company. It includes both components, and these are mutually decided and agreed upon.
Regards
From India, Delhi
Acknowledge(0)Amend(0)
CTC includes total cost that a company bears for a particular employee so Employer’s PF & ESIC contribution is included in CTC.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Understanding CTC and Employer Contributions
You need to first understand what CTC is. It is the total cost to the company, including salary, PF, ESI, bonus, gratuity, conveyance, and various other allowances. Whatever comes out of the company's coffers to employ an employee is that employee's cost to the company (CTC).
Calculations of the amounts deducted towards PF and ESI, etc., are not based on the CTC but are calculated as a percentage of the wages, which are a part of the employee's salary. Both employers' and employees' contributions towards PF, etc., are deducted as a percentage of 'Minimum Wages' of the employee, which form a part of his salary, and the total adds up to the employee's CTC. It is usually expressed in terms of the annual cost, and hence the monthly cost is multiplied by 12 to arrive at the annual CTC.
I hope this clears the doubt.
Regards,
Aye.
Colonel Gahlot
'TRURECRUIT' Placement Consultancy
[Phone Number Removed For Privacy Reasons]
From India, Delhi
Acknowledge(0)Amend(0)
You need to first understand what CTC is. It is the total cost to the company, including salary, PF, ESI, bonus, gratuity, conveyance, and various other allowances. Whatever comes out of the company's coffers to employ an employee is that employee's cost to the company (CTC).
Calculations of the amounts deducted towards PF and ESI, etc., are not based on the CTC but are calculated as a percentage of the wages, which are a part of the employee's salary. Both employers' and employees' contributions towards PF, etc., are deducted as a percentage of 'Minimum Wages' of the employee, which form a part of his salary, and the total adds up to the employee's CTC. It is usually expressed in terms of the annual cost, and hence the monthly cost is multiplied by 12 to arrive at the annual CTC.
I hope this clears the doubt.
Regards,
Aye.
Colonel Gahlot
'TRURECRUIT' Placement Consultancy
[Phone Number Removed For Privacy Reasons]
From India, Delhi
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.
CTC SALARY SLIP FORM.xls
HR Concern for Employer n Employee.doc