Special Allowance - Salary Structure

Dear Vinay,

Special Allowance is any Allowance which is given under the following circumstances:

1) To Regularise Salary Structure:

For example: Suppose while recruiting a person for a particular position (say Dy. Manager) the annual CTC agreed upon is 12.00 lacs. Now, giving all allowances, perquisites along with the Salary for Dy. Managers in you Company comes to 11.00 lacs. Now this extra 1.00 lac can be given by way of Special Allowance.

2) To save post retiral benefits:

For example : If the Basic Pay of Employees are increased it has cumulative effect on PF, Gratuity and Leave Pay, so most companies when giving high rise in Salary usually give the rise in Special Allowance to save themselve from paying high retiral benefits and higher contribution to PF, Gratuity and Leave Pay.

Always remember it is easier to change Special Allowance as it can be treated and adjusted on case to case basis, while the same cannot be done for other allowances and perquisities like HRA, Conveyance which are general set on grade/designation wise. So, Special Alllowance is an allowance where if you cannot put a payment under any other hrasd you put it under Special Pay.

3) Others:Special Allowance relating to any court order, legislature or nature of Duty.

Revert back for further queries,

Regards,
SC

Hi SC,

Thanks for your valuable comments.
secondly I wants to know what are the criteria to decide HRA,

According to my knowledge it will be 5% of Total basic or Rs.40 whichever his higher but still I have some doubt.

Please send you comments on this above topic.

Regard,
Vijay

Dear Vijay,

Sorry for the delay..

You have said:
This percentage and amount is given in state House Rent Allowance Acts, like the 5% of Basic Salary is mentioned in West Bengal House Rent Allowance Act, so for employees covered under this Act, in States where there is such a statute; you must give the stated minimum amount as per the same.

For HRA since there is a Income Tax Benefit by way of rent paid, it is always better to give a substaintial amount under HRA to avail the Tax Benefits.

Regards,
SC

Hi,

Following is the salary sheet format you just put up salary in the salary sheet then automatically it will give the break ups.I have also attached salary slip format for your reference.

Salary Sheet Format.xls

sal slip Format .doc

Hi, SC,I am Rajan here,as you said Spl.Allowance we can change as per requirement,aslo you said to avoid high portion of contribution to pf,and bonus ,gratuity we can keep spl.allowance as per our requirement,but cannot its attract contr.towards pf,and with basic cannot we consider spl.allw.for bonus grat.calculation.perhaps in so many company spl.allowance fixed with govt.notification,for half yearly or monthly in that case we cannot change it.and i am not agree with point no.1 that 1 lakh we can put in spl.allowance.please advise.Rajan

Hi Swastik... thanx so much for sharing the information... that was really helpful.... :)

Dear all, Can anybody help me to caluclate Special Allowance, and Conveyance Allowance. Please let me know the percentage (%) to caluclate these allowance. With Love Ashok

Hi. I m sending u al a copy of Salary Slip Structure

Attached Files

Provided by community member Virka. Join us to learn and grow with your peers.

salary_break_up_calculator.xls (17.5 KB, 1057 views)