Question: How Is PF Calculated From CTC?

Is PF deducted from CTC?

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).

Employer PF is part of CTC not shown on Salary Slip..

Can I take loan from PF?

An individual having a PF account can withdraw funds from the account as loan. Partial withdrawal is possible in case the loan is towards buying/repairing a house. The employee should be in service for 5 years to be eligible to get loan against PF.

What is mean by CTC in salary?

cost to companyWhile business owners in many other countries may use terms like “gross salary” and “net salary” when referring to an employee’s salary, “cost to company” or CTC is the most common term used in India. This term includes the direct and indirect costs associated with paying an employee.

Is PF compulsory?

Under the EPF&MP Act, 1952, an EPF account is mandatory for all employees with a basic salary up to `15,000 per month in firms employing more than 20 workers. While 12% of the basic salary is deducted for PF from the worker, the employer makes a matching contribution.

What percentage of CTC is basic?

Usually, basic salary is 40% to 50% of CTC (Cost to Company). Statutory components such as bonus, PF, gratuity and other benefits are determined on the basis of the basic salary. Any increase or decrease of basic salary can affect an employee’s CTC. Is basic salary taxable?

How do you figure out 30% of your income?

To calculate, simply divide your annual gross income by 40. Another rule of thumb is the 30% rule, meaning that you can put 30% of your annual gross income in rent. If you make $90,000 a year, you can spend $27,000 on rent, and so your monthly rent should be $2,250.

Which is better CTC or gross salary?

Gross salary is the amount after the EPF and gratuity are subtracted from the CTC. Basically, the remuneration paid before deducting the income tax, professional tax, and other deductions. It is inclusive of bonuses, overtime pay, paid holiday amount, and other differentials.

How do you calculate CTC per annum?

CTC = Earnings + Deductions Here, Earnings = Basic Salary + Dearness Allowance + House Rent Allowance + Conveyance Allowance + Medical Allowance + Special Allowance.

On which amount PF is deducted?

From the employer’s EPF contribution, 8.33 per cent goes towards the Employee Pension Scheme (EPS) and the remaining to the PF account of the employer. This EPS component is calculated on the basic pay of Rs 15,000, or actual basic pay, whichever is lesser.

How is PF pension calculated?

Earlier, EPFO was providing pension calculated on the salary of the employee with a maximum cap at Rs. 15,000. Now that the cap of Rs. 15,000 has been removed, the EPS contributions will be calculated based at 8.33% of the actual salary of the employee.

Who is eligible for PF pension?

Eligibility criteria for EPS Be an EPFO member. Complete 10 years of active service along with equal years of active contribution towards the EPF pension Scheme. Be 58 years or above. Have attained at least 50 years of age to withdraw from the EPS pension at a lower rate.

Is PF taxable on retirement?

There is no tax on the EPF balance till the date of retirement. However, according to a recent ruling, any interest credited to the EPF account after retirement is taxable under the head ‘income from other sources’.

Is PF mandatory above 15000?

EPF eligibility criteria 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.

How do you calculate 30 percent?

Once you have the decimal figure, multiply it by the number for which you seek to calculate the percentage; i.e., if you need to know 30 percent of 100, you convert 30 percent to a decimal (0.30) and multiply it by 100 (0.30 x 100, which equals 30).

How is PF calculated from salary?

Calculation of PF PF contribution has to be made both by the employees and the employer. The contributions get accumulated in the provident fund in the name of the employee. The contribution of the employer is 12% of the basic wage plus dearness allowance or DA. The employee makes an equal contribution.

How do you calculate a company’s CTC?

It is calculated by adding salary to the cost of all additional benefits an employee receives during the service period. If an employee’s salary is ₹500,000 and the company pays an additional ₹50,000 for their health insurance, the CTC is ₹550,000. Employees may not directly receive the CTC amount.

How is CTC percentage calculated?

Formula Calculation Steps:Step 1: Multiply current salary with percentage of increment.Step 2: Divide the result by 100.Step 3: Then add the result with current salary.

What is minimum pension of EPF?

Apart from this, the Government of India also contributes 1.16% of the employee’s basic salary into his/her EPS account. However, this facility is available for government employees only. Currently, the minimum monthly pension that an individual will receive after his/her retirement through the EPS scheme is Rs. 1,000.