Both Company And Worker Contribution Of PF Is Deducted From The Worker Salary?

Hi,

In my company, they are deducting Rs. 780 as PF from my salary. However, they are also deducting the company's contribution of Rs. 780, making the total deduction Rs. 1560 from my salary. When I asked HR about this, they mentioned that in my appointment order, it was specified that both the company and worker contributions to PF would be deducted from the worker's salary.

Is this right or wrong? Please, can anyone reply to me regarding this issue?

Hi Praveen,

It's 100% wrong. You need to check with your HR Manager and get it cleared. Everywhere the general practice is 12% for the employee and 12% for the employer. I am really surprised how other employees in the organization agreed.

Thank you for your reply.

Since I joined this company new, they told me that it is their company policy and mentioned in the appointment letter. Frankly, they had mentioned details like company contribution to PF of Rs780 and basic salary, etc., in the appointment letter. For other employees, they are not deducting the company's contribution to PF from their salary.

What can I do? Please help me.

Dear Praveen,

Please check if they have included company contribution as a part of your CTC amount. As you mentioned, company contribution is mentioned in your appointment letter, and employee PF contribution, professional tax, etc., are deducted from employees' monthly salary.

Thanks & Regards,
Pranali G

Pls note that you cannot specify anything in the appointment letter or in an agreement which is in violation of the law and it will not stand the legal scrutiny. Recovery of PF employer share form employee’s salary is against the sprit of the law. The company is liable to refund the amount recovered.

Hi Praveen,

It is correct. PF contribution will be 12% from both the Employee and employer. The PF ceiling amount is Rs. 6500/-, which means Rs. 780 per month. If an employee's monthly PF crosses Rs. 780/-, they may contribute only Rs. 780/-. If the employee wants to contribute more than Rs. 780/-, they may approach the concerned HR and ask for a 12% deduction only. So, Praveen, just check with your HR if you have crossed the ceiling amount or not. The PF formula is (Basic+DA)*12%. If you have crossed more than Rs. 780/-, then it is correct; otherwise, you have to talk to the management.

Regards, Gautami Executive - HR, Polmon Instruments Pvt. Ltd.

Standard working hours for BPOs should be standardized. Some companies have 8-hour shifts, while others have 8.5 or 9-hour shifts. It is crucial to establish a uniform standard across the industry for consistency and efficiency.

Deducting employer contributions from employee gross salary is completely illegal, but there is a difference between gross salary and CTC. Please check whether they are deducting it from CTC or basic salary. Approach your HR and present your case. If they are not willing to correct the issue, you can approach the local PF office and file a written complaint against them. The PF inspector/commissioner will investigate the matter, which will definitely help other employees as well.

Thank you,
Manish Gupta

It is wrong practice of your employee. He cannot deduct employer's share from your salary. If it is done, it is wrong.

If an employer has issued a CTC break-up to the employee, then it is obvious that a part of the employee's salary would be deducted from his CTC, which is a common practice nowadays. Most companies offer a CTC break-up to the employee, in which all the employer's liabilities are laid down on the employee. I request all seniors to please tell me if there is any provision in the law that can prove that the CTC is illegal.

Mahendra