Hi,
I work at a retail company in Vizag. Recently, my company implemented the Minimum Wages Act and increased the salary by up to 20%. However, the employees are complaining that their take-home pay has been drastically reduced, as the increase in their salaries is marginal.
As per the Minimum Wages Act:
- Basic: 4102
- DA: 538
- Other allowances: 332
- Gross: 4972
- Net after deducting PF, PT, ESI is 4393
Is there any way that I can increase the employees' net salary? Can I make changes to their basic pay? Please reply as soon as possible.
Thank you,
Vyjayanthi
From India, Visakhapatnam
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I work at a retail company in Vizag. Recently, my company implemented the Minimum Wages Act and increased the salary by up to 20%. However, the employees are complaining that their take-home pay has been drastically reduced, as the increase in their salaries is marginal.
As per the Minimum Wages Act:
- Basic: 4102
- DA: 538
- Other allowances: 332
- Gross: 4972
- Net after deducting PF, PT, ESI is 4393
Is there any way that I can increase the employees' net salary? Can I make changes to their basic pay? Please reply as soon as possible.
Thank you,
Vyjayanthi
From India, Visakhapatnam
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Hi,
Once the basic is decided, you cannot reduce the basic; you can increase it though. If you have only the mentioned components, then to increase the net salary, you can add an amount to other allowances, which will only affect ESIC and PT. Looking at your current structure, there is no scope to increase the net salary.
Regards,
Harshad
From India, Mumbai
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26Once the basic is decided, you cannot reduce the basic; you can increase it though. If you have only the mentioned components, then to increase the net salary, you can add an amount to other allowances, which will only affect ESIC and PT. Looking at your current structure, there is no scope to increase the net salary.
Regards,
Harshad
From India, Mumbai
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As Mr. Harshad mentioned, you can add to other allowances. There is no point in adding this if you have considered the basic as less. At least you will have hope in reducing PF deductions. The net pay can increase in this case.
From India, Bangalore
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From India, Bangalore
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dear you can not reduce basic or DA.in this salary structure you can not increase take home.you have to increase salary to increase take home ,which u will not do. tks j s malik
From India, Delhi
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From India, Delhi
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Dear Vyjayanthi,
After reviewing your situation, it seems difficult to manage the salary structure of your workers and you may find it challenging to ask your employer for a salary increase at this time.
To address this, you should communicate with your employees about the benefits of ESIC and PF. They may be open to the idea.
If you truly wish to pay Rs. 4972 instead of Rs. 4393, you could consider implementing an incentive scheme based on your targeted sales. This way, your employees will be motivated, leading to an increase in sales. Additionally, they would receive Rs. 500 as an incentive.
Please let me know if you need further assistance or clarification.
Best regards,
[Your Name]
From India, Pune
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After reviewing your situation, it seems difficult to manage the salary structure of your workers and you may find it challenging to ask your employer for a salary increase at this time.
To address this, you should communicate with your employees about the benefits of ESIC and PF. They may be open to the idea.
If you truly wish to pay Rs. 4972 instead of Rs. 4393, you could consider implementing an incentive scheme based on your targeted sales. This way, your employees will be motivated, leading to an increase in sales. Additionally, they would receive Rs. 500 as an incentive.
Please let me know if you need further assistance or clarification.
Best regards,
[Your Name]
From India, Pune
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Dear Vyjayanti,
As per my knowledge, if you increase the basic salary, the take-home pay can also increase. Additionally, tax deductions will be lower. Alternatively, you can add the increased amount to other allowances. By doing so, you can classify these as reimbursements, which are exempt from income tax by providing the bills.
Regards,
Eshwar Reddy
9704799908
Vizag.
From India, Bangalore
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As per my knowledge, if you increase the basic salary, the take-home pay can also increase. Additionally, tax deductions will be lower. Alternatively, you can add the increased amount to other allowances. By doing so, you can classify these as reimbursements, which are exempt from income tax by providing the bills.
Regards,
Eshwar Reddy
9704799908
Vizag.
From India, Bangalore
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Your basic and DA percentage is 13%.
1. Revisit your minimum wage slabs and find out the exact amount of minimum wages you have to pay.
2. If you have uniformed staff, other allowances can be named as a washing allowance, thus escaping the ESI ambit (a very meager increase) - this will also be excluded in PT. Not least, your salary calculations are wrong - you are charging PF and ESI only on basic, whereas DA and other allowances are not covered. This system is not legally valid. The actual take-home pay will be much less compared to what you mentioned. DA is included in the PF ambit. Other allowances - if not mentioned explicitly and if not found in the ESI exclusion list - are included in the ESI ambit.
From India, Madras
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1. Revisit your minimum wage slabs and find out the exact amount of minimum wages you have to pay.
2. If you have uniformed staff, other allowances can be named as a washing allowance, thus escaping the ESI ambit (a very meager increase) - this will also be excluded in PT. Not least, your salary calculations are wrong - you are charging PF and ESI only on basic, whereas DA and other allowances are not covered. This system is not legally valid. The actual take-home pay will be much less compared to what you mentioned. DA is included in the PF ambit. Other allowances - if not mentioned explicitly and if not found in the ESI exclusion list - are included in the ESI ambit.
From India, Madras
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Hi,
It will not be possible to increase the take-home salary without any financial liability. If your employer can take on additional liability, the following options are available:
- Introduce an incentive scheme.
- Any shortage of staff may be met by offering overtime (OT).
- Introduce welfare facilities such as a subsidized canteen and education fee reimbursement for employees' children.
From India, Delhi
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It will not be possible to increase the take-home salary without any financial liability. If your employer can take on additional liability, the following options are available:
- Introduce an incentive scheme.
- Any shortage of staff may be met by offering overtime (OT).
- Introduce welfare facilities such as a subsidized canteen and education fee reimbursement for employees' children.
From India, Delhi
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I think the objective of the minimum wage act is to ensure compliance with the minimum wage components, which include basic pay, DA, and HRA.
For example:
Basic: Rs. 1700
HRA: Rs. 2000
DA: Rs. 538
The take-home pay after deductions for PF and ESI is Rs. 3895 (269 + 74). Does this meet the requirements of the minimum wage law? HR friends, please provide clarification.
Dakshina Murty
From India, Hyderabad
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For example:
Basic: Rs. 1700
HRA: Rs. 2000
DA: Rs. 538
The take-home pay after deductions for PF and ESI is Rs. 3895 (269 + 74). Does this meet the requirements of the minimum wage law? HR friends, please provide clarification.
Dakshina Murty
From India, Hyderabad
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