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Kamal   20 January 2018

Retirals clarification wrt CTC

In my CTC, retirals were not mentioned now after 5 months of service my manager said extra 12% of basic salary is gonna deduct because it was not getting deducted before. Are they legally authorized to deduct company part of pf without mentioning that in CTC they offered?


 6 Replies

R.Ramachandran (Advocate)     20 January 2018

You are bound to contribute 12% towards Provident Fund.

Equal % the employer would contribute to your PF.

Therefore, there is nothing wrong in the company deducting the 12% towards PF from your monthly salary.

Kumar Doab (FIN)     20 January 2018

If you wish you may attach the CTC discussed, offered in writing during job advt/interview/selection/offer letter and thereafter in appointment letter or annexure….etc….

Until or unless there is any variance in CTC offered and provided you may not have enough grounds to agitate.

If the establishment and employee are covered by PF,ESIC etc then employer has to deduct employee’s contribution and add employer’s contribution and deposit with regulator….. 

Kumar Doab (FIN)     20 January 2018

In future negotiate properly like a properly informed employee should negotiate, and get everything in writing e.g. Basic, DA,HRA, LTA other allowances, Gross salary, deductions, salary after deductions and everything be reflected in CTC………..

If you wish and employer agrees renegotiate and employer may agree to increase CTC. 

Kumar Doab (FIN)     20 January 2018

Note that PF,ESIC offer unmtachable benefits to the employee.....

Employee should also negotiate to remain covered in all employments....

R.Ramachandran (Advocate)     21 January 2018

Dont get confused.

Even now the Company is paying you the agreed CTC.

You may then ask, if that be so, they why the Company is deducting 12% from my salary (which is CTC) towards PF.

Please appreciate.  It is the statutory requirement that every employee should join PF.  It is statutory requirement that 12% of salary to be contributed to PF by the employee concerned and correspondingly 12% to be contributed by the Company.

So, either you can get the full monthly salary (CTC assured by the company) and then make payment of 12% towards your contribution to the PF either by cash or by cheque.  For example, if your CTC is Rs. 1000/- you can get the whole amount.  Thereafter you have to contribute to your PF 12% i.e. Rs. 120/-  So, you will be left with Rs. 880/-.

Instead of first paying the entire salary of Rs. 1000 to you and then getting the contribution of 12% (Rs. 120/-) from you, what is being done is to deduct the Rs. 120/- and then make balance payment of Rs. 880/- to you.  

Therefore, the Company has not changed/altered the agreed CTC to you.

Therefore, the question of renegotiating CTC simply does not arise.  Even if you re-negotiate your CTC, say from Rs. 1000 to Rs. 1500/-  Then again, you have to independently contribute 12% of Rs. 1500/- (Rs. 180) towards PF and you will get net of only Rs. 1320/-  

Therefore, first understand what is CTC, and what are your personal liabilities/responsibilities towards PF contribution etc.  Unless you understand the correct position, there is every chance of your misunderstanding the issue, and every chance of being mislead.

Kumar Doab (FIN)     22 January 2018

Is the employer not issuing salary slip showing payment of earned wages, deductions…..!

There is NO bar on negotiating, renegotiating salary/Gross salary/CTC …………..and IT is easy to mislead a properly informed employee.

Approaching employer for the same is neither misrepresentation or misleading or being mislead.

Any employee that knows his/her worth and value to establishment and whose worth is known to employer….can succeed in negotiations with employer.

Nevertheless,  if there is any reason employee can firm up next venture on better terms and at better position/grades and separate.

Employee should remain amiable and gentle.

A sincere attempt has been made to update and inform you in all posts.

Become properly informed.

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