The Hidden Truth in Your Offer Letter: What the ‘Employer EPF’ Really Says About a Company
You open your offer letter.
There it is — that big, bold number. ₹20 Lakh CTC.
It feels like validation. You earned this.
But here’s the catch: that number might not mean what you think it means.
After two decades in HR, I can tell you — CTC is one of the most misunderstood figures in Indian corporate life.
It’s also one of the easiest to manipulate.
CTC ≠ Gross ≠ In-Hand
Let’s start by decoding the basics:
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Cost to Company (CTC): The total cost your employer incurs to keep you on payroll — salary, bonuses, benefits, and statutory contributions.
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Gross Salary: The amount your taxes and your deductions (like employee EPF) are calculated on.
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In-Hand Salary: What actually lands in your bank account after all deductions.
Now here’s where it gets interesting — and revealing.
The 12% EPF Trick
Under the EPF & MP Act, 1952, employers must contribute 12% of your Basic Salary to your provident fund.
This is their legal obligation, not a benefit. It’s money they owe for you, not from you.
Yet, many companies quietly fold this into your CTC — making it look like a part of your “package.”
That’s like your landlord adding his property tax to your rent and calling it a favor.
Two Companies, Same CTC. Different Realities.
Let’s say you’re offered a ₹20 Lakh CTC.
| Approach | How It’s Structured | What It Means for You |
|---|---|---|
| 1. Transparent (Employee-Friendly) | Employer adds EPF on top of your salary | You get ₹20L Gross + ₹72K EPF + other benefits |
| 2. Inflated (Cosmetic CTC) | Employer includes EPF inside your ₹20L CTC | You get only ₹19.28L Gross — ₹72K less salary |
Same “₹20L CTC” on paper.
But in the inflated version, you lose ₹72K of real, taxable income — every single year.
Why It Matters: Transparency Over Optics
This isn’t just about ₹72,000.
It’s about how a company treats information and fairness.
A transparent company will show you the full Gross Salary and add their statutory costs on top.
An inflated one will tuck them inside — to make the number look prettier.
And here’s the thing: compensation philosophy often mirrors culture.
If they blur details at the offer stage, expect the same during performance reviews and bonuses.
Ask This Before You Sign
When comparing offers, don’t just chase the higher CTC.
Ask one question that reveals everything:
“Is the Employer’s EPF contribution included in the CTC, or is it over and above my Gross Salary?”
If the answer isn’t immediate or clear, that’s your red flag.
The ‘EPF+’ Shortcut: See the Difference Instantly
The In-Hand Salary Calculator is built for exactly this reason.
It’s the only tool in India that lets you model both cases — inflated vs transparent — with a single click.
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Enter your CTC.
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Calculate your in-hand normally.
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Then toggle ‘EPF+’.
You’ll instantly see how much your take-home changes when the employer’s EPF is included inside your CTC versus added on top.
It’s a one-click reality check.
Try it now at www.in-hand.in.
Final Thought
Before you celebrate that “₹20L CTC,” pause and decode it.
Because the real number that matters isn’t the one in your offer letter — it’s the one that shows up in your account.
Know your CTC. Understand your EPF. Own your salary story.