Is there any hidden benefit that the company enjoys by deducting higher PF from the employee's salary?
I have recently joined a new company, and my PF deduction is nearly double that of an ex-employee whose CTC was much more. To be precise for my CTC of 15000 the PF deducted is nearly double of the PF deducted from the salary of the other person whose CTC was 20000. This, inspite of the management promising me a salary structure where I could get maximum amount as take home and the deductions would be minimum.
On discrete enquiries with the HR staff, they did not have the faintest clue as to what could be the reason behind this. But I did get to know that if they wanted, the management could withold sending signed papers to the PF department to release the PF amount of the employee and that they have done so in the past.
I thought once the PF was deducted and deposited with the PF department, no one could meddle with it and that the employee had the sole right to it.
Can anyone explain this.
Thanking you all in advance.
Radha
From India, Madras
I have recently joined a new company, and my PF deduction is nearly double that of an ex-employee whose CTC was much more. To be precise for my CTC of 15000 the PF deducted is nearly double of the PF deducted from the salary of the other person whose CTC was 20000. This, inspite of the management promising me a salary structure where I could get maximum amount as take home and the deductions would be minimum.
On discrete enquiries with the HR staff, they did not have the faintest clue as to what could be the reason behind this. But I did get to know that if they wanted, the management could withold sending signed papers to the PF department to release the PF amount of the employee and that they have done so in the past.
I thought once the PF was deducted and deposited with the PF department, no one could meddle with it and that the employee had the sole right to it.
Can anyone explain this.
Thanking you all in advance.
Radha
From India, Madras
Hi, Radha
You need to see your Appopintment letter for the breakup if any. If your Basic salary is more than 6500.00 p.m then you have the option of not opting for PF. Secondly in your CTC the company contribution is included then the deduction might be around 24%( 12% each from employee and employeer). Company does not have any benefit of deducting higher PF.
So check your breakup of CTC. If you let me know the breakup then i can explain you in detail.
Regards,
Harshad
From India, Mumbai
25You need to see your Appopintment letter for the breakup if any. If your Basic salary is more than 6500.00 p.m then you have the option of not opting for PF. Secondly in your CTC the company contribution is included then the deduction might be around 24%( 12% each from employee and employeer). Company does not have any benefit of deducting higher PF.
So check your breakup of CTC. If you let me know the breakup then i can explain you in detail.
Regards,
Harshad
From India, Mumbai
Harshad
Thanks for your prompt response.
Yes, the basic for my CTC of 15000 is 7000 whereas other older employess whose salaries are in the range of 20000 and plus, the basic is just 4000.
What is puzzling is that another employee who joined along with me three months back amd whose CTC is 14000 also has the same basic as mine i.e. 7000. Obviously the management has been upto something. As this is a small company and the management and HR is the same group of 2-3 people it is very difficult to find out what actually is going on.
Therefore I decided to post this query. Since posting this query I have also been going through the archives of the CiteHr and there seems to have been a no. of queries regarding PF, especially where one employee of WIPRO has not been able to claim his PF even after five years of leaving the company!!!!!.
As my company also asks for one year bond and in the past due to low salary and bad managemet policies and work environment, a lot techies havebeen compelled to breakthe bond. So is this a new way of harrassing the employees? As I mentioned in my earlier post the management/HR promised to keep salary structure such that the I could get maximum take home with minimum deductions and also I am a non techniocal person.
From India, Madras
Thanks for your prompt response.
Yes, the basic for my CTC of 15000 is 7000 whereas other older employess whose salaries are in the range of 20000 and plus, the basic is just 4000.
What is puzzling is that another employee who joined along with me three months back amd whose CTC is 14000 also has the same basic as mine i.e. 7000. Obviously the management has been upto something. As this is a small company and the management and HR is the same group of 2-3 people it is very difficult to find out what actually is going on.
Therefore I decided to post this query. Since posting this query I have also been going through the archives of the CiteHr and there seems to have been a no. of queries regarding PF, especially where one employee of WIPRO has not been able to claim his PF even after five years of leaving the company!!!!!.
As my company also asks for one year bond and in the past due to low salary and bad managemet policies and work environment, a lot techies havebeen compelled to breakthe bond. So is this a new way of harrassing the employees? As I mentioned in my earlier post the management/HR promised to keep salary structure such that the I could get maximum take home with minimum deductions and also I am a non techniocal person.
From India, Madras
Hi Radha,
It seems that you are working for a family owend company where family members are only handling the all affairs of the company. You should be very careful as to your salary structure. You must take the breakup of your salary structure.
If you have any other query do write to me.
Enjoy,
Harshad
From India, Mumbai
It seems that you are working for a family owend company where family members are only handling the all affairs of the company. You should be very careful as to your salary structure. You must take the breakup of your salary structure.
If you have any other query do write to me.
Enjoy,
Harshad
From India, Mumbai
Harshad Thanks again and yes it is a family owned company. Even though it is a wee bit late in the day but I am trying to be careful. Better late than never, I guess. Radha
From India, Madras
From India, Madras
Hi Radha, Harshad,
There is a benefit for the employee if they keep the PF option.
They earn interest which is always more than 8% on a monthly basis.
+ (plus) you tend to save some money :D
Also you get tax exemption u/s 80C for PF which is deducted from your salary.
Hence opting for PF is always beneficial.
Hope you would like this......But only worry by checking the above communications is that please check if the PF amount deducted from your salary is deposited with the PF authorities / PF trust. :?
Smiles,
Navroz
From India
There is a benefit for the employee if they keep the PF option.
They earn interest which is always more than 8% on a monthly basis.
+ (plus) you tend to save some money :D
Also you get tax exemption u/s 80C for PF which is deducted from your salary.
Hence opting for PF is always beneficial.
Hope you would like this......But only worry by checking the above communications is that please check if the PF amount deducted from your salary is deposited with the PF authorities / PF trust. :?
Smiles,
Navroz
From India
Hi,
You may note that
1. No one can prevent you from withdrawing your amount, irrespective of whether your employer signs the forms or not.
2. It is good for you as equal amount will be deposited by the employer (if both contribution is not included in CTC)
3. The employer can keep pending the amount to be deposited till Feb, as returns are filed in April. So if you leave after March, your employer must have deposited in PF account.
4. Employers keep depositing the amount pending to deny those who leave without fulfilling the obligations. However, as returns are filed in April, they pay for all pending amount by March.
If any details are needed, you can contact me.
Thanks
From India, Mumbai
You may note that
1. No one can prevent you from withdrawing your amount, irrespective of whether your employer signs the forms or not.
2. It is good for you as equal amount will be deposited by the employer (if both contribution is not included in CTC)
3. The employer can keep pending the amount to be deposited till Feb, as returns are filed in April. So if you leave after March, your employer must have deposited in PF account.
4. Employers keep depositing the amount pending to deny those who leave without fulfilling the obligations. However, as returns are filed in April, they pay for all pending amount by March.
If any details are needed, you can contact me.
Thanks
From India, Mumbai
Thanks Navroz and Siva
As I mentioned earlier, both the PF contributions(employee's as well as the employer's) are from my CTC. So the deduction is quite high and my take home is relatively lower.
I do know that PF deposits are beneficial in the long run but my only doubt is(as I mentioned earlier) that - is there a way that an employer can create a situation wherein the employee finds it difficult to withdraw the money from the PF department. In that case there is no point of having a PF contribution.
This, I am asking because
1) I am under a 1 year bond here and things are not too good here with lot techies having broken the bond and gone elsewhere.
2) I also feel cheated because the figure which is now my CTC was actually quoted as my salary at the time interview and I have been told that they have done the same with all employees - technical and non technical.
It is therefore natural for me to feel wary of my employers all the time.
3) What still puzzles me is why was my basic kept so high - a figure nealry double that of the older employees drawing much higher salaries than me????? This, inspite of having promised me maximum "take home" and minimum deductions!!!!!!!
Radha
From India, Madras
As I mentioned earlier, both the PF contributions(employee's as well as the employer's) are from my CTC. So the deduction is quite high and my take home is relatively lower.
I do know that PF deposits are beneficial in the long run but my only doubt is(as I mentioned earlier) that - is there a way that an employer can create a situation wherein the employee finds it difficult to withdraw the money from the PF department. In that case there is no point of having a PF contribution.
This, I am asking because
1) I am under a 1 year bond here and things are not too good here with lot techies having broken the bond and gone elsewhere.
2) I also feel cheated because the figure which is now my CTC was actually quoted as my salary at the time interview and I have been told that they have done the same with all employees - technical and non technical.
It is therefore natural for me to feel wary of my employers all the time.
3) What still puzzles me is why was my basic kept so high - a figure nealry double that of the older employees drawing much higher salaries than me????? This, inspite of having promised me maximum "take home" and minimum deductions!!!!!!!
Radha
From India, Madras
Hi
i must suggest you to ask your organization about your pf no. and check same with the pf authority. For your information now pf department has issued social security no to its Members, once you got your PF no or social security no.. then no one can hold or stop your contribution, one more thing a you can ask your employer to show you your contribution once in a three month period in form 3A which is maintained by every employer. And please do not forget to collect your salary slips duly signed by employer. for any other query You can contact Me
Lokesh Sharma
09818882227
From India, Delhi
i must suggest you to ask your organization about your pf no. and check same with the pf authority. For your information now pf department has issued social security no to its Members, once you got your PF no or social security no.. then no one can hold or stop your contribution, one more thing a you can ask your employer to show you your contribution once in a three month period in form 3A which is maintained by every employer. And please do not forget to collect your salary slips duly signed by employer. for any other query You can contact Me
Lokesh Sharma
09818882227
From India, Delhi
Hi Radha,
I agree wit Logesh. It is not mandatory that Employer should contribute 12% for those whose basic is more than6500. The ceiling for employers is Rs.780.00 only whereas they can collect 12% of basic from employee with the wish of employee and deposit.
You should definitely ask for your PF no. FYI this should be quoted in your salary statement. Also once in a year the employer should issue a slip to you showing the details of PF amount deducted and deposited in the year. Hence, you hold all the rights to ask for your contribution details. Also note that sometimes, the employer do not deposit the amount with the PF department and they enjoy it. Anyhow, they will have to pay to the PF department with penalty. In any case, it is better to know the details of your contribution. U can ask for Form3A. Also keep your salary statements safe. Hope I am clear. If you have any doubts please let me know
Priya Maran
From India, Madras
I agree wit Logesh. It is not mandatory that Employer should contribute 12% for those whose basic is more than6500. The ceiling for employers is Rs.780.00 only whereas they can collect 12% of basic from employee with the wish of employee and deposit.
You should definitely ask for your PF no. FYI this should be quoted in your salary statement. Also once in a year the employer should issue a slip to you showing the details of PF amount deducted and deposited in the year. Hence, you hold all the rights to ask for your contribution details. Also note that sometimes, the employer do not deposit the amount with the PF department and they enjoy it. Anyhow, they will have to pay to the PF department with penalty. In any case, it is better to know the details of your contribution. U can ask for Form3A. Also keep your salary statements safe. Hope I am clear. If you have any doubts please let me know
Priya Maran
From India, Madras
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