Question 1

Are allowances subject to EPF and ETF?

Accepted Answer

It depends. Fixed allowances, like a Cost of Living Allowance (COLA), are legally subject to EPF and ETF. However, reimbursable allowances, such as travel or telephone reimbursements, are generally exempt.

Question 2

What is the difference between Gross Salary and CTC?

Accepted Answer

Gross Salary is the total amount on the offer letter before the employee's 8% EPF deduction. CTC (Cost to Company) is the Gross Salary plus the employer's mandatory 15% contribution (12% EPF + 3% ETF).

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