lovermickey Started The Discussion:
Hello everyone,i am a student in university. Now,we are doing a project and imitating a company,I am reponsible for the HR department,and now i need to make a salry structure.
I don't know how to do it firstly? what's the main point?
Could you give me some ideas or examples?
First to create a salary , have to know about salary.
Salary -- is the amount which is paid to an employee for his service.
Govt has made few rules on salary . Like Min. Wages Act,etc.
Few Components in Salary.
Basic --Min amount paid to an employee .
DA(Dearness Allowance)-allowance paid to employee with basic.
HRA(House Rent Allowance)-which is given as allowance.
LTA(Leave Travel Allowance)-
Employer PF-Which is an indirect monthly payment to employee credited to his PF account for his future benifits(not a part of salary as per PF act)
CEA(Children Educational Allowance)
These are few things which are in salary earnings.
PF(Provident Fund)-12% on basic
PT( Professional Tax as per state)
ESI(Employee state Insurance)
Hope this will hep you.
for reducing the tax, you need to refer to your country Labor Law, or any other regulation implemented in Europe, I think for the size & sector of the business define the salary ranges, in average for London ranges it's from $ 9,000 - $ 70,000 for SME, taking into consideration the number of grades and the overlapping when designing your structure.
for further information kindly contact me on my email: -
Eng. Muhammad Abuissa
To create a salary structure you need first to define salary grade then destripute basic salary to those grades
let say your grades are ( 1, 2, 3,....10)
Then The basic salary is to be Overlapped ( which is the best practice in grading system)
Grade 1 = Basic 1000 $ to 2500$
Grade 2 = Basic 2300& to 3500$
Grade 3 = Basic 3200$ to 5000$
The from to will set for you three points of the salary; Minimum, Mid, & Maximum.
I have attached a Wage Breakdown Structure (WBS) I created. After the different wage classifications have been created, one only needs to match a wage classification to each position on the organizational chart. The next step after that is to calculate the total wage and benifit package for each employee using the wage classification from the WBS. Bhagwat Kadam attached a spreadsheet that shows the wages and benefits for many employees. Because you are in Holland, you will have to resarch to find the typical benefit packages being offered in your country.
At first , you need to set up and define salary grade ,then set up minimun Basic salary for each grade . Off course , you must refer to the labour law and labour market .
Attached file for your reference definition of position and grade2007 a.xls
Hope this will help you
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