Provident Fund (EPF)
Definition
A retirement savings scheme in India where both employee and employer contribute a percentage of basic wages to the Employees' Provident Fund. The accumulated balance, with interest, is paid out on retirement or exit.
Related Terms in Payroll
Employees' State Insurance (ESI)
An Indian social-security scheme providing medical and cash benefits to employees earning below a wage threshold, funded by employee and employer contributions on gross wages.
Gratuity
A lump-sum payment made by an Indian employer to an employee who has completed a minimum period of continuous service, calculated on last-drawn salary and years of service, payable on retirement or exit.
Basic Salary
The fixed core component of an employee's pay, before allowances and bonuses. Many statutory calculations — provident fund, gratuity and others — are based on basic salary, so its proportion of the package matters.
Cost to Company (CTC)
The total annual cost an employer bears for an employee in India, including salary, allowances, employer contributions and benefits. It is larger than take-home pay because it includes costs the employee never receives in cash.
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