Hello Friends!
I am a student pursuing my MBA in HR. I have to design a compensation and benefits structure for a hypothetical company. If anybody has any relevant information that will assist me in designing, please forward it to me.
Thanks
From India, Pune
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I am a student pursuing my MBA in HR. I have to design a compensation and benefits structure for a hypothetical company. If anybody has any relevant information that will assist me in designing, please forward it to me.
Thanks
From India, Pune
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Dear Kalyani,
You may follow this structure as well.
Anyways, the Basic would be approximately 40-50% of gross, and 40-60% of that would be HRA. Conveyance Allowance is fixed at 800/- and is exempted from tax. Educational Allowance is 200 per child and restricted to a maximum of 2 children. Medical allowance is 1250/-, also exempted from tax. Other allowances make up the remaining amount to complete the Gross salary, i.e.
Other Allowance = Gross - (Basic + HRA + CA + Medical + Edu Allowance)
So, we can say Gross Salary = Basic + HRA + CCA + Edu + Other Allowance
Medical allowance, if provided as reimbursement, shall be exempted from taxes, and the ceiling is Rs. 1250 per month.
Out of this, only two components may be deducted: one is PF, which would be 12% of Basic, and ESI, 1.75% of gross if the Gross is below 10,000/-.
I have explained only regarding the Gross/Month. Regarding CTC, you have to do some more exercise. First, Calculate Gross/Annum = 12*Gross/Month, then add Ex-Gratia or Bonus in a lump sum. It will now become AFGC (Annual Fixed Gross Cost). Then add PF contribution and ESI, 4.75% of Gross if applicable from the employer side per annum, then it comes to your CTC or ATC.
It means CTC = Gross/Annum + Ex-Gratia + PF & ESI contribution.
If any other benefits are being provided from the company side, then you should also add them to conclude your CTC.
I hope it is much clearer for you now. If you have any queries, feel free to revert.
Regards,
Amit Seth.
From India, Ahmadabad
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508You may follow this structure as well.
Anyways, the Basic would be approximately 40-50% of gross, and 40-60% of that would be HRA. Conveyance Allowance is fixed at 800/- and is exempted from tax. Educational Allowance is 200 per child and restricted to a maximum of 2 children. Medical allowance is 1250/-, also exempted from tax. Other allowances make up the remaining amount to complete the Gross salary, i.e.
Other Allowance = Gross - (Basic + HRA + CA + Medical + Edu Allowance)
So, we can say Gross Salary = Basic + HRA + CCA + Edu + Other Allowance
Medical allowance, if provided as reimbursement, shall be exempted from taxes, and the ceiling is Rs. 1250 per month.
Out of this, only two components may be deducted: one is PF, which would be 12% of Basic, and ESI, 1.75% of gross if the Gross is below 10,000/-.
I have explained only regarding the Gross/Month. Regarding CTC, you have to do some more exercise. First, Calculate Gross/Annum = 12*Gross/Month, then add Ex-Gratia or Bonus in a lump sum. It will now become AFGC (Annual Fixed Gross Cost). Then add PF contribution and ESI, 4.75% of Gross if applicable from the employer side per annum, then it comes to your CTC or ATC.
It means CTC = Gross/Annum + Ex-Gratia + PF & ESI contribution.
If any other benefits are being provided from the company side, then you should also add them to conclude your CTC.
I hope it is much clearer for you now. If you have any queries, feel free to revert.
Regards,
Amit Seth.
From India, Ahmadabad
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PMS COmpensation and Benefits.doc
Compensation Structure.ppt
CTC CALCULATION SHEET.xls