Dear all, I have a friend who is working for a consultancy. She is placed at the client's site to handle recruitment. Her cost to company (CTC) as per the offer is INR 9604 per month, and her take-home pay is INR 8000. Her basic salary is INR 4663, and her gross pay is INR 8672.
Provident Fund and ESI Deductions
The employer's contribution towards the provident fund (PF) is deducted from INR 9604, but it is not shown on the payslip. The PF and ESI deductions from the gross pay are INR 520 and INR 152, respectively. However, as per the salary breakup, the PF and ESI deducted should be INR 500 and INR 412, respectively.
Kindly guide me on ESI and PF calculations and help me understand if there is any manipulation. Also, please clarify whether the CTC includes the employer's PF and ESI contributions.
Regards,
AMU
From India, Bangalore
Acknowledge(0)
Amend(0)
Provident Fund and ESI Deductions
The employer's contribution towards the provident fund (PF) is deducted from INR 9604, but it is not shown on the payslip. The PF and ESI deductions from the gross pay are INR 520 and INR 152, respectively. However, as per the salary breakup, the PF and ESI deducted should be INR 500 and INR 412, respectively.
Kindly guide me on ESI and PF calculations and help me understand if there is any manipulation. Also, please clarify whether the CTC includes the employer's PF and ESI contributions.
Regards,
AMU
From India, Bangalore
Acknowledge(0)Amend(0)
Now, as per the corporate culture, all contributions are included in the CTC. However, you should only focus on the Gross pay part. In this case, ESI contributions of both the employee and employer are deducted from the Gross pay of 8672 only. But the PF contribution is not matching based on the information you provided. If you have any doubts, please do reach out to me.
Regards,
From India, Bangalore
Acknowledge(0)Amend(0)
653Regards,
From India, Bangalore
Acknowledge(0)Amend(0)
Just an update.
In a salary slip, only the PF and ESI of the employee's side are shown, and not the employer's side deduction. While calculating manually, everything is included in the CTC and deducted from the Special Allowance.
PF and ESI Calculation Example
In your case, AMU, if the MCTC is Rs 9604, then the calculation of PF should be 12% on Rs 4663 (basic), which is Rs 559.56. The gross salary is coming up to Rs 9044.44, so based on the Gross Salary, the contribution of ESI should be 1.75% of 9044 = Rs 158, and for the employer's contribution, it is 4.75% of Rs 9044 = Rs 430 (unless he is getting LTA and then tax deduction based on his yearly GTI, his gross salary can be less as you haven't mentioned the components).
If you can share the other components of the salary breakup, I can help you find out the discrepancy.
Regards,
Pooja
From United Kingdom, Leeds
Acknowledge(0)Amend(0)
In a salary slip, only the PF and ESI of the employee's side are shown, and not the employer's side deduction. While calculating manually, everything is included in the CTC and deducted from the Special Allowance.
PF and ESI Calculation Example
In your case, AMU, if the MCTC is Rs 9604, then the calculation of PF should be 12% on Rs 4663 (basic), which is Rs 559.56. The gross salary is coming up to Rs 9044.44, so based on the Gross Salary, the contribution of ESI should be 1.75% of 9044 = Rs 158, and for the employer's contribution, it is 4.75% of Rs 9044 = Rs 430 (unless he is getting LTA and then tax deduction based on his yearly GTI, his gross salary can be less as you haven't mentioned the components).
If you can share the other components of the salary breakup, I can help you find out the discrepancy.
Regards,
Pooja
From United Kingdom, Leeds
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-Freezed PF-ESI.xls
PF & ESI.zip
Presentation PF&ESI.ppt