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Salary component
#1
Can we calculate salary this way? We want to include LTA and Gratuity in future only.

120000 Yearly Monthly 10000
Basic Pay 48000 4000
HRA 24000 2000
Conveyances 19200 1600
Medical Allowances 15000 1250
LTA 0 0
Special Allowances 7267.2 606
PF Contribution (ER.) 6532.8 544
Gratuity 0 0
Total 120000 10000
Deduction 5760 480
Professional Tax 2500 200
Net Pay 111740 9312


Attached Files
.xlsx   Salary calculation.xlsx (Size: 9.7 KB / Downloads: 47)
 
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#2
Can we calculate salary this way? We want to include LTA and Gratuity in future only.

120000 Yearly Monthly 10000
Basic Pay 48000 4000
HRA 24000 2000
Conveyances 19200 1600
Medical Allowances 15000 1250
LTA 0 0
Special Allowances 7267.2 606
PF Contribution (ER.) 6532.8 544
Gratuity 0 0
Total 120000 10000
Deduction 5760 480
Professional Tax 2500 200
Net Pay 111740 9312



Points
1. what should be the % for basic pay (40% is standard)
2. If its minimum like 30-25% then PF amount also reduced which can be good for employer and employee.
3. Also HRA will be minimum (negative effect on HRA tax exemption)
4. Only Special Allowance will increased ( Can this make a problem? if yes then any company can make this kind of format)
 
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#3
1. It is practise to keep 40% basic of CTC/Gross. There is no law.
2. Employer can go to keep Basic to 25-30% of CTC provided it is not less than minimum wage of State.
3. Yes, less Basic means less exemption on HRA if employee is paying rent.
4. No problem.

Govind Singh Negi
HR Professional- Sr Management
Follow at twitter: @govindsinghneg3 https://twitter.com/govindsinghneg3
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#4
Hi Govind,

Our company is planning to re structure the salary components
what can be the ideal salary structure to get less deductions to employee & employer also?
Which components can be included?


Regards.
Sakshi G
 
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#5
Hi Sakshi,

You can refer below blog for your query:

http://hrsuccesstalk.com/2014/04/22/must...-employee/
Regards
Team - HR SUCCESS TALK
 
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#6
(30-11-2016, 02:24 PM)Deepti Koranne Wrote: Hi Sakshi,

You can refer below blog for your query:

http://hrsuccesstalk.com/2014/04/22/must...-employee/

Thanks Deepti Maam, but can i get an elaborated idea of which components i can include in salary the structure

Since i am doing this for this first time very confused about inclusion of components


Regards,
Sakshi G
 
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#7
Hi Sakshi,

This is a detailed and customized discussion. I am afraid, I wont be able to put my suggestion on form in that detail.

Eg. I dont know whether company is registered under PF or not etc etc

Govind Singh Negi
HR Professional- Sr Management
Follow at twitter: @govindsinghneg3 https://twitter.com/govindsinghneg3
Catch on Facebook: http://www.facebook.com/pages/HR-Success...2717854041
 
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#8
I Read your article on Gratuity Act. It was very informative. I am working as an HR, currently handling payroll. I have a Query i.e. one of our employee who left our company within 2 years of his work span, is demanding Gratuity. I have a belief that Gratuity is payable after completion of 5 Years of Service. But he is adamant and asking for it. His reason for saying it is that Gratuity was mentioned as part of his CTC and month on month basis, it was deducted from his salary. So based on that deduction he is asking for it.
We already told him that CTC is the Cost incurring to the employer and the portion where Gratuity is mentioned is Company Contribution.
Please insight your views on the same as what will be our steps against it. How should we deal with it as he might take it legally!


Regards
Biraj
 
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#9
Hi Biraj,

This is most common confusion occurrence when Gratuity is made part of CTC. Well, you are correct, Gratuity is paid only after completion of 5 years.

You are also correct in your explanation that gratuity mentioned in CTC is employer cost and not deduction from salary.

Govind Singh Negi
HR Professional- Sr Management
Follow at twitter: @govindsinghneg3 https://twitter.com/govindsinghneg3
Catch on Facebook: http://www.facebook.com/pages/HR-Success...2717854041
 
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