Determining Employer Contribution to PF
Please suggest how we can determine whether one share of PF has been contributed by the employer or if both shares have been deducted from our CTC only.
Please do reply.
Many thanks,
Ranjana Chourasia
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3Please suggest how we can determine whether one share of PF has been contributed by the employer or if both shares have been deducted from our CTC only.
Please do reply.
Many thanks,
Ranjana Chourasia
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Your query is a little confusing. I am trying to answer it based on my understanding. Please provide more details if needed.
Checking Deposits in Your PF Account
Every person will have a number for their PF Account, usually shared with you. You can check the balance periodically to ensure that your monthly deposits are being submitted correctly.
Contribution
Please note that PF contribution is equally shared by the employee and employer. If your basic + DA is less than or equal to the stipulated 6500 (as per the act), you will get 12% on your actual (basic + DA). If your basic + DA is more than 6500, the 12% contribution is limited to the 6500 limit.
Many companies, out of goodwill, contribute 12% on the actual amount. This policy varies depending on the company. A minimum of 12% on 6500 (780/-) per month should be contributed from both sides.
Additionally, administration and account handling charges are to be paid by the employer (not deducted from your salary), which amounts to approximately 1.6% of basic + DA.
Out of the employer's 12% contribution, only 3.67% goes to the PF fund, while the main contribution of 8.33% goes to the pension fund for retirement benefits.
Understanding Your Salary Components
After calculating all components that your company pays you and arriving at your monthly gross salary, statutory deductions such as PF, ESIC (if applicable), PT, TDS, etc., are subtracted to arrive at your monthly net salary (take-home pay).
Your 12% contribution is deducted from your salary. The employer's contribution is an expense for the company and may be included in your CTC but cannot be deducted from your salary.
Your monthly Gross (Basic + DA + HRA + Conveyance + Allowances, etc.) * 12 = Annual Gross
Annual Gross + Bonus + Employer's PF + Gratuity Contribution + Any other contributions/expenses the company makes for you = CTC
I hope I have clarified your doubts. For further information, you can also explore other discussions on PF to understand the liability and related matters.
1) https://www.citehr.com/67598-provide...-pf-trust.html
2) HR SUCCESS TALK: PF Fundamentals everyone should know!!
3) http://epfindia.gov.in <link updated to site home>
From India, Mumbai
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Checking Deposits in Your PF Account
Every person will have a number for their PF Account, usually shared with you. You can check the balance periodically to ensure that your monthly deposits are being submitted correctly.
Contribution
Please note that PF contribution is equally shared by the employee and employer. If your basic + DA is less than or equal to the stipulated 6500 (as per the act), you will get 12% on your actual (basic + DA). If your basic + DA is more than 6500, the 12% contribution is limited to the 6500 limit.
Many companies, out of goodwill, contribute 12% on the actual amount. This policy varies depending on the company. A minimum of 12% on 6500 (780/-) per month should be contributed from both sides.
Additionally, administration and account handling charges are to be paid by the employer (not deducted from your salary), which amounts to approximately 1.6% of basic + DA.
Out of the employer's 12% contribution, only 3.67% goes to the PF fund, while the main contribution of 8.33% goes to the pension fund for retirement benefits.
Understanding Your Salary Components
After calculating all components that your company pays you and arriving at your monthly gross salary, statutory deductions such as PF, ESIC (if applicable), PT, TDS, etc., are subtracted to arrive at your monthly net salary (take-home pay).
Your 12% contribution is deducted from your salary. The employer's contribution is an expense for the company and may be included in your CTC but cannot be deducted from your salary.
Your monthly Gross (Basic + DA + HRA + Conveyance + Allowances, etc.) * 12 = Annual Gross
Annual Gross + Bonus + Employer's PF + Gratuity Contribution + Any other contributions/expenses the company makes for you = CTC
I hope I have clarified your doubts. For further information, you can also explore other discussions on PF to understand the liability and related matters.
1) https://www.citehr.com/67598-provide...-pf-trust.html
2) HR SUCCESS TALK: PF Fundamentals everyone should know!!
3) http://epfindia.gov.in <link updated to site home>
From India, Mumbai
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PF NO Contribution on CTC.pdf