As per the Employees Provident Fund Act, the employer's share cannot be deducted from the member . Also, it cannot be recovered from the salary of employees. ... If the employee PF was deducted and not paid, it is incorrect.
Is employer contribution to PF part of salary?
Your employer must contribute an amount equal to 10% or 12% of your basic salary towards EPF. For female employees, the government contribution doesn't change.
Is employer PF deducted from CTC?
Employer PF is part of CTC not shown on Salary Slip. It is NOT counted as part of your earnings and hence not taxed.
Why employer PF is deducted from salary?
As per the Employees Provident Fund Act, the employer's share cannot be deducted from the member . Also, it cannot be recovered from the salary of employees. ... If the employee PF was deducted and not paid, it is incorrect.
Is employer contribution to PF allowed as deduction?
Employee's Contribution: Deduction under Section 80C is available. Employer's Contribution: Exempt up to 12% of Salary . Thus Contribution made by employer exceeding 12% shall be added to employee's salary Income.
What percentage of CTC is PF?
The contribution to the PF account is 12 per cent of the basic pay .
Is PF mandatory for salary above 15000?
If you are drawing a salary higher than Rs. 15,000 per month, you are termed a non-eligible employee and it is not mandatory for you to become a member of the EPF , although you can still register with the consent of your employer and approval from the Assistant PF Commissioner.
What is CTC salary?
Cost to Company or CTC as it is commonly called, is the cost a company incurs when hiring an employee. CTC involves a number of other elements and is cumulative of House Rent Allowance (HRA), Provident Fund (PF), and Medical Insurance among other allowances which are added to the basic salary.
What is the new rule of PF deduction?
The rule requires all PF accounts to be split into separate accounts – one with the taxable contribution and interest earned on that component, and another with the non-taxable contribution that shall include the closing balance of the PF account as on March 31, 2021 and all fresh non-taxable contributions and interest ...
Can I stop my PF deduction?
Ans : There is no restriction of period for membership . Even after leaving the establishment a person can continue his membership. However, if no contribution is received into a PF account for 3 consecutive years the account shall not earn any interest after 3 years from the stopping of contribution.
How PF is calculated on 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 contribution mandatory?
EPF is a retirement benefit plan where both employer and employee contribute a certain percentage of the salary. Who is eligible to join EPF scheme? According to the EPF scheme rules, it is mandatory for an employee to join the EPF scheme if his pay is less than or equal to Rs 15,000 a month .
How is PF calculated on CTC salary?
Most employers contribute 12% (called PF) of basic salary every month to employee's Provident fund account, shown in CTC. An employee also contributes 12% (called VPF). Difference between Employer PF, Employee PF (Called VPF) and PPF. Employer PF is part of CTC not shown on Salary Slip.
What is CTC in hand salary calculation?
In-Hand Salary = Monthly Gross Income – Income Tax – Employee PF – Other Deductions , if any. These deductions will vary depending on the CTC. The main deductions from the salary are provident fund, Income tax, and professional tax.
What percentage of CTC is in hand salary?
It is a fixed component of the salary and usually comprises 40% to 50% of the total CTC . Many other CTC components like contribution to provident fund, gratuity and others are determined on the basic salary.
What is current PF limit for salary?
Employees drawing less than Rs 15,000 per month have to mandatorily become members of the EPF. However, an employee who is drawing ‘pay' above prescribed limit (currently Rs 15,000) can become a member with permission of Assistant PF Commissioner, if he and his employer agree.
