Is PF part of base salary?

For EPF, an employee contributes 12 per cent of the basic salary while the employer contributes 8.33 per cent towards Employees' Pension Scheme and 3.67 per cent to employees' EPF. The total of the employee and employer contribution is deposited in a fund created with the Employee Provident Fund Organization.

Is PF a part of salary?

Gross Salary is the term used to describe all the money an employee has made working for the company in a year. It is the salary that is without any deductions like PF, Income Tax, etc. However, Gross Salary includes basic salary, house rent allowance, special allowance, and conveyance allowance, among others.

Is EPF included in gross salary?

The employer may count his PF contribution to you as your gross salary. But in the EPF, the employer's contribution is exempt from tax. Only employee's contribution is included in gross taxable salary and the same is shown as deductions u/s 80C.

Is PF calculated on basic or gross?

You and your employer need to transfer 10% or 12% of your basic salary to contribute towards EPF. However, if you are a woman, you only need to contribute 8% of your basic salary for the first three years. During this period, your employer's EPF contribution will remain 12%.

How is PF calculated on CTC salary?

Under CTC model, if the monthly EPF wages of an employee is Rs 10,000, then he/she will get Rs 200 more directly from the employer as the share of the employer's contribution to EPF/EPS will be reduced and Rs 200 less will be deducted from his/her wages, according to the FAQ on reduced rate of contribution released by ...

EPF (Employee Provident Fund) – Calculation, Withdrawal Rules, Interest Rate

What is included in salary for PF calculation?

For EPF, both the employee and the employer contribute an equal amount of 12% of the monthly salary of the employee. Employees can contribute more than 12% of their salary voluntarily, however the employer is not bound to match the extra contribution of the employee.

What is the base salary?

A base salary is the minimum amount you can expect to earn in exchange for your time or services. This is the amount earned before benefits, bonuses, or compensation is added. Base salaries are set at either an hourly rate or as weekly, monthly, or annual income.

Is PF included in fixed salary?

The Cost to Company (CTC) is the amount decided by the company while recruiting an employee. It involves other elements such as the House Rent Allowance (HRA), Gratuity, Provident Fund (PF), and Medical Insurance among other allowances which are added to the basic salary.

Is employer PF part of fixed salary?

Hi, Yes. The Employer Contribution to PF is the part of CTC(Cost to the company). The CTC concept introduced to calculate the cost of each employee to the company.

Why PF is deducted from salary?

The PF scheme is managed under the Employees' Provident Fund Organisation. Under this scheme, an employee has to pay a certain amount of sum from their salary towards the scheme. The employer makes an equal contribution to the scheme and the employee can avail the lump sum amount with interest on retirement.

How is base salary calculated?

Why PF gets deducted twice from salary?

If the salary is mentioned as CTC, the employer PF amount only will be given in the offer letter. Employee PF amount will not be shown and it will be deducted from the salary. so it is logical only. CTC means cost to the company which is given by the company employee deductions to be not given.

What all is included in CTC?

The CTC includes all the elements of a salary structure - basic salary, House Rent Allowance (HRA), Basic Allowance, Travel Allowance, Medical, Communication, Provident Fund, Pension Fund, and or any incentives or variable pay.

Is base salary same as basic salary?

What is the difference between base salary and basic salary? The base salary is a subcategory of the basic salary, referring to the initial amount of the basic salary range which is given to the employee in the beginning.

What is the difference between base salary and gross salary?

Gross Salary. Base salary and gross salary have the same differences as base pay and gross pay. That is, base salary does not include additional compensation such as overtime pay, but gross salary does. The base salary and gross salary may be the same amount if there is no additional compensation to take into account.

Is base salary and in hand salary same?

Basic salary: Also known as in-hand pay, this is a fixed component of your compensation that never changes. Allowances: Employees get several sorts of allowances, such as home rent allowance (HRA), leave travel allowance (LTA), dearness allowance, children's education allowance, etc.

Is PF calculated on HRA?

Employee Provident Fund (EPF)

To calculate the salary components under employer's contribution towards the provident fund, one has to consider the same salary components of HRA i.e; Basic Salary, Dearness Allowance(DA) and Commission (if paid as percentage of turnover).

What is the rule of PF?

The new rules for PF deduction are impacting the employees are: The annual contribution limit will be Rs 2.5 lakh will apply for EPF members when PF and GPF where there is no contribution from the employer, the being has been set at Rs 5 lakh.

How can I calculate PF if basic salary is less than 15000?

15,000 per month. The contribution paid by the employer is 12% of basic wages plus dearness allowance plus retaining allowance. An equal contribution is payable by the employee also. ... If the basic pay is less than Rs 15000 then 8.33% of that full amount will go into EPS.

How does pf work in private company?

According to the EPF rules, 12 percent of your salary must go towards your provident fund. Your company is also required to contribute the same 12 percent, out of which 8.33 percent of the salary is directed towards the Employee Pension Scheme or EPS. The remaining 3.67 percent are put into your EPF.

Why gratuity is part of CTC?

It is a cost to company on employee. Employer has to make provision on Gratuity payment of every employee employed by him. He has to create a fund for Gratuity or to go for Gratuity Policy for which he has to pay premium. Therefore it is a cost to him and accordingly he can add this cost in CTC.

What is base salary India?

Base salary, therefore, does not include bonuses, benefits or any other compensation from employers. As the name suggests, basic salary is the core of the salary of an employee. It is a fixed part of the compensation structure of an employee and generally depends on her or her designation.

At what salary PF is not deducted?

There is no limit to the employees' contribution to PF, he can contribute up to 100% of his Basic + DA (PF Wages) towards PF, but it must be a minimum of 12 per cent of the same. However, if your employee draws a salary more than Rs. 15,000 per month, then he/she can also choose to not contribute to the Provident Fund.

Is PF admin charges part of CTC?

Myth – Employees bear PF admin charges

Some employers transfer the cost of managing a PF to employees by making it a part of the CTC. However, this practice is wrong.