How Is PF Calculated In CTC?

How is PF calculated on CTC salary?

This means that the salary you will get in-hand for this month will be higher by a sum equivalent to 4% of your basic and DA.

For example, if your monthly basic and DA is ₹10,000, both you and your employer will contribute ₹1,000 each instead of ₹1,200 each to the EPF account..

How is PF 2020 calculated?

Assuming the interest rate for 2019-2020 is 8.5%, while calculating interest applicable for each month you’ll have to divide 8.50% by 12. Therefore, 8.50%/12 = 0.7083% will be your monthly rate of interest. If contributions start from April, your total EPF contribution for the month would be ₹3,550.

What is current PF limit for salary?

Rs 15,000 per monthEmployees 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.

Can I take out my PF money?

Yes, you now have the option to withdrawn from your EPF corpus. However, since the money contributed by you to your EPF account is a type of forced saving, withdrawing from your EPF corpus should be your last resort. So, consider and exhaust all other options before withdrawing from your EPF account.

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.

Is VPF better than PPF?

PPF vs VPF: Interest rate, lock-in period Currently, VPF gives higher returns than PPF. While PPF is offering 7.1% interest, VPF is offering 8.5% interest. Making VPF contributions is very simple and straightforward. Unlike PPF, you don’t need to open an account with a registered bank or post office.

Is EPF included in 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.

How is PF contribution calculated?

– If you are a man, you must contribute 10% or 12% of your basic salary. – In case you are a new woman employee, it is 8% of your basic salary for the first 3 years. Thereafter, it becomes 10% or 12% of your basic salary. – Your employer has to contribute an amount equal to 10% or 12% of your basic salary towards EPF.

What is CTC salary?

Cost to company (CTC) is a term for the total salary package of an employee, used in countries such as India and South Africa. … It is calculated by adding salary to the cost of all additional benefits an employee receives during the service period.

Is PF mandatory for salary above 15000?

It is mandatory for an organisation employing more than 20 people to register with EPFO. While contributing towards EPF is mandatory for those earning basic wages of up to Rs 15,000. Those earning basic wages more than 15000 per month, EPF contribution is not mandatory.

Is PF calculated on gross salary?

PF calculation: Since the employee’s Basic is above Rs 6,500, the stipulated ceiling for mandatory PF Gross, his PF contribution can be calculated as 12% of Basic i.e. Rs 1,200 in this case. … Salary: An employee receives Basic pay of Rs 3,000 per month and Rs 3,000 each under Special Allowance and Other Allowance.

What is CTC in hand salary calculation?

How to calculate your take-home salary?Step 1: Calculate gross salary. Gross Salary = CTC – (EPF + Gratuity)Step 2: Calculate taxable income. Taxable Income = Income (Gross Salary + other income) – Deductions. … Step 3: Calculate income tax** … Step 4: Calculating in-hand/take home salary.