Hi All,

We are following the concept of CTC in our organisation and the main components of the same are:

1. Basic salary

2. HRA

3. Medical

4. Transport allowance

5. Compensatory allowance

5. PF contribution by employer

The grand total of this is CTC, the deductions are towards PF only, for employee contribution.

Now the problem I am facing is that the format i am using as salary breakup annexure doesn't seem to be well received by new joinees, and they fail to understand the concept of CTC and specially the fact that pf contribution by employer is part of CTC. Could you please help in sharing the information on the same, as to the good format, that shopuld be given with the appointment letter.

Also, related to this is pay slip to be give every month, we are not including PF contribution by employer in monthly pay slip, and taking rest of the amount as Gross salary.

Is there any way where we can show the emplpyer contribution also in the pay slip/ is it mandatory to do that?

Please advise!!

Best Regards'

Anu B

From India, Hyderabad


CTC!!--the misnomer!

The term cost to company has come to be used in common parlance when we talk about a pay packet.This hitherto was considered as what one would get in his 'pay cover' .Be it cash or cheque.Attached to this was the 'pay slip'giving details of rate of wages[basic+Da+othercomponents}with deductions such as EPF/ESI/LIC/LOANS/ADVANCES/PT.This was calculated on the number of days worked in that calender month.{This was provided as a fromat under the minimum wages act ]

During the last decade the trend changed.The cost per employee i.e the total expenses direct and indirect that a company would incur for retaining the employee was calculated.This included salary,Employers contribution on EPF,ESI,Gratuity,excess leave allowed other than the statutory allowed,Bonus in excess of the statutory etc and the final figure

shown/offered as "CTC" to the employee.

The visibility of the employers share was made prominent.This Exercise is not understood by many as the basic thought lingering on the mind "MONEY IN THE COVER'--the difference in the payment received from his /her previous employer might be marginal or in some cases less...so the feeling of 'BEING CHEATED' arose and the PR exercise for the HR began.

Most employers to get over this area of anomoly have given the details more LUCIDLY with workings and exact take home amount.The adding of the EMPLOYERS SHARE is shown clearly and how it is disbursed-monthly/Quarterly'annually.

It is always cheerful to remember this offer document is doing THE PUBLIC RELATIONS for your company.The letter is being looked by many and the peer talk should not send the wrong signals about the company!!!


From United States
Hi I have to prepare the salary slip for my top management kindly help me and give me the suggestion what are headings or compounds are to be using in fixed and variable headings. rgds sak:(
From India, Madras
HI dear, the components of the salary breakup are: 1) Basic 2)HRA 3) DA 4)OTHER ALLOWANCES
From India, Delhi

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