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Thread Started by #CHR

- Basic Salary
- Commissions/Incentives
- Bonus
- Dearness allowance
- Child Education Allowance (better give as reimbursement to save tax)
- Child Hostel Allowance (better give as reimbursement to save tax)
- City Compensatory Allowance
- Conveyance Allowance
- House Rent Allowance
- Leave Travel Allowance ( better give as reimbursement upto a maiximum of 15,000/- to save tax)
- Lunch Allowance
- Medical reimbursement to a maximium of 15,000/ (otherwise it will go in tax)
- Newspaper allowance (better give as reimbursement to save tax)
- Special Allowance
- Gift voucher
- Club membership (save tax)
6th June 2004 From India, Gurgaon
You can also add :
1. Uniform Maintenance
2. Professional Enrichment Allowance
3. Entertaintment (Reimbursement) etc.,
4. Vehicle Allowance
5. Phone Allowance
Most of the component above can be considered for Higher grade salaries.
9th June 2004
I just wanted to know the limits of Uniform Maintenence and Professional Enrichment Allowance Regards Amit
10th June 2004 From India, Ahmadabad
Professional Enrichment :
Eligible employees may request reimbursement for expenses associated with professional development such as seminars, books, professionally related dues etc. for the employee’s professional or echnical growth. Amount of maximum reimbursement is in accordance with the employee’s memorandum of understanding.
Uniform Maitenance can be reimbursed in accordance with the employee memorandum of understanding
10th June 2004
Dear Colleagues,

Let me add a few words to the issues raised on Compensation & Benefits.

One basic thing is the status of employee/s concerned, department which such belongs to and probably the level of hazard related tasks such might be involved in and more importantly business environment and industry.

However some allowances not mentioned would include but not limited to the underlisted:

*Fuel Allowance (Petrol/Diesel)

*Driver's Allowance

*Mobile/Cell Phone Allowance

*Power Generator Alowance

*Internet Access Allowance

*Academic/ Professional Membership Allowance

*Accident Free Allowance (for Drivers)

*Night Shift Allowance

*Furniture Allowance

*Mortgage Allowance

*Offshore/Rig Allowance

*Gas Allowance (domestic)

*Dressing Allowance-Marketing Team/TV Broadcasters

Sincerely the list can go on and on, but as I have earlier said staffers' status in the Company would certainly determine what he/she gets as compensation and the industry they belong to would be the launching pad for such.


Afolabi Ajayi
3rd September 2004 From Nigeria, Lagos
I have gone just joined the forum, and was going thro' the discussions on the salary structures in India. It is indeed very enlighting, but I had a query ... all these allowances , what kind of limits are applicable in order to make them tax free. eg medical is 15000/- p.a. what about the rest??
22nd December 2004 From India, Delhi
hi pooja Conveyance allowance is tax free till Rs 800 /- Pm ( Rs 9600/- P .A ) Above which it becomes taxable. REgards Ashit
18th March 2005 From India, Mumbai
hi all,
its very informative, but i would like to know wht is max limit for gettign tax exemptions.
in the recent budget, there is some thing abt imposing tax on fringe benifits, tht tax mostly would be borne by the employer. wht is the % which would be imposed. i qwould be pleased if any one of you share the information.
thanks and regards
18th March 2005 From India, Madras
As i know that conveyance allowance 800/- and medical allowance 1250/- per month minimum can be paid.
But still i need to ask what are the set rules for salary breakup.
As in my company employee is getting 50000/- salary per month or if somebody is getting 20000/-, 15000/-, 10000/-, 8500/-, 7000/-, . And we break the salary in following components :
Basic ( how we break basic pay?)
Medical Allowances
Conveyance Allowances
Special Allowances ( is it taxable ?)
5th April 2005
Off-hand, what the FBT says is to tax all of the financial transactions which happens due to an employee (be it business related hence taxed by the employer or salary component -the tax component being passed on to the employee).
Currently, with the kind of uproar this new tax component is creating, i doubt that the tax is going to become legal (though some form of it might stay).
Probably the best bet to look at the financial impact of your salary (including allof the perks, perquisites etc) would be done through a visit to a Chartered Accountant.
PS - i am currently looking at re-structuring my own salary and you bet, next week on monday i am meeting my company's CA for his approval/suggestions.
7th April 2005 From India, Mumbai
Hi All: This is Radhika Pallav, joined new to the group. Just wanted to know what are the fixed ratio for the components of CTC salary in India. Please advice. Regards Radhika
7th April 2005 From India, Madras
pls could u tell me , whether in india we have a branding of employees? and i had also read of "BUFFET BENIFIT PACAKAGES" what are thys?
2nd May 2005 From India, New Delhi
Reema: Are you referring to "Cafeteria Style" benefits where a party can pick and choose the specific benefit package which he or she wants, dependent upon specific needs and ability to pay? Alan
3rd May 2005 From United States, Bluff City
Dear All,
If anyone has salary structure of IT companies pls forward to me my email id
If you have sample copy how to work out the structure, pls send it to me
I would be thankful for your help
10th May 2005 From India, Bangalore
hi this is Sylvester Arockia dass.P I have Just joined the network. It was nice and interesting to go through the messages and informations. I wish every ona veye happy and healthy career :P
23rd May 2005
Components of Monthly Salary can be divided into sub heads such as:
1.Salary that includes Basic ; HRA ; Special Allowance,
2. Perquisites that includes Allowances and Reimbursements
3. Other Perquisites
--- Monthly Provided (Coupons ) & Annullay Provided (LTA;Medical)
4.Statutory Contributions (P.F ,ESI )
The same can be subject to change as per the existing policy of the company.
30th June 2005 From United States, Santa Clara
  • Basic
    Dearness allowance
    City compensatory allowance (CCA)
    Conveyance allowance
    Flexible benefit plan
    Leave encashment
    Leave travel allowance
    Children education or hostel allowance
    Employee stock option

11th July 2005 From India, Ahmadabad
The other major component (opted by many MNC’s) of salary in India are a) medical reimbursements b) Food Coupons
11th July 2005 From India, New Delhi
Dear Madam, Me 2 facing th same problem, Can u let me know if u have got some advice on the Salary front. Rgds Fabian
2nd August 2005 From India, Mumbai
Dear all,
I had the same problem plz any one can help me out. please let me know what are the compents to fix a salary for an IT company keeping into consideration of latest tax rules.
i would be thankful if any one will help me out.
2nd August 2005 From India, Hyderabad
Dear Swati, Do you need any help in organizing events / shows? If so, let me know or you can call me on mob: 98865 87912 - Srinivas Rgds, Srinivas
2nd August 2005
Dear Afolabi Ajayi, Got the full details about the salary coponents. This would help me in structuring the package for employees. Thank you very much. Vasanthi Chennai +91 98408 63066
31st August 2005
General components of salary in india varies from organisation to organisation but the most common are
1.In Government Circle
Basic Pay
Dearness Allowance
House rent Allowance
Conveyance / Transport Allowance
2. In Semi Govt. / PSU
Basic pay
Dearness Allowance
House rent Allowance
Conveyance / Transport Allowance
City Compensatory Allowance.
3. In Induatrial Organisation
Basic Pay
Dearness /Variable Dearness Allownace
House Rent Allowance
Conveyance / Transport Allowance
4. In Other establishments
Basic pay
House Rent Allowance
Conveyance / Transport Allowance
Rest all other components are "just named" or "to save tax" components, which depends upon the thought process of naming an allowance by organisation.
You are free to give a name to any component untill or unless it has no relevance with statutory requirements e.g EPF, ESI, Bonus, Gratuity , I Tax and Ind.Dispute Act.
Anil Anand
30th September 2005 From India, New Delhi
hiii all... The general components of salary was too good and informative..but i have a query regarding the calculation of cost to company.. Can anyone tell me how to go about it!!! Regards Tanu..
6th October 2005 From India, Mumbai
You can add the following:
Telephone Reimbursement (bi-monthly)
Internet reimbursement
Turnout Allowance (Security and others)
Split Shift Allowance ( For drivers and others)
Credit Card Annual Fee reimbursement
Gardner Allowance (For senior executives)
Domestic Help allowance (Senior Executives)
Leave Travel Concession or Leave Travel Assistance
Charge Allowance( Some body is discharging the HOD responsibility for more than two months) or Officiating Allowance
Professional Fee Reimbursement (The fee paid to the professional bodies
by the employees/executives can be reimbursed)
Disturbance Allowance (In case of transfer and not shifted family to the present place of posting)
A.Ratna Sekhar
6th January 2006 From India, Hyderabad
Thank you very much for your reply madam.By the way i am smitha.I would like to more about HR.Actually I have a paasion to get into HR.But I do not understand from where to start and how to start?could anyone help me pls.I am doing my MBA in HR but working as Administration and Finance Executive.
6th January 2006
Dear friends,
I would like to know what percentage of Total earnings must be the basic pay and allowances etc etc... I guess there must be some measure for every thing. I hear ppl telling Basic pay must be 25 % and some 40 % so I am not sure about that. I will be fine if someone tell me the exact details of it.
Thanks a ton !!
8th March 2006 From India, Bangalore
Dear harry
Generally you can take 35 to 40 % as basic. Let me explain you this way
let the gross is Rs 2,00,000 / annum and the following components can be derived ( Annual figures)
Basic : Rs 80,000 (40 % of Gross)
HRA : Rs 32,000 (40% of Basics)
CCA : Rs 16,000 ( 20% of Basics)
PF : Rs 9,600 ( 12% of Basics)
Medical Reimb. Rs 15,000 ( Maximum limit)
Find the total of these components and let that total be X. then find out the difference between 2,00,000 and the X and that amount you can adjust for other allowances and reimbursement.
14th April 2006 From India, New Delhi
hi i am chinna student of HR i would like to know what are the percentages of individual components in the salary please help me. with regards. chinna
9th May 2006 From India, Bangalore
Dear All,
Kindly, mention the proportionate percentage for arriving at basic salary from CTC. Our company adopts 35% of basic salary to arrive at HRA. What percentage of gross is basic ?
I need to arrive at the breakup for Rs. 540000 CTC
Please mention the break up for the same.
Your suggestions will be highly appreciated.
5th November 2006
In to-day's business environment, the business performance plays a vital role in very existence of the word "Employee" and based on this performance - the salaray components should be defined. In our establishment, this component plays a vital role. So, we pay 60% of pay package as variable and 40% as fixed. The Fixed component is distributed in Basic,DA,Special allowance,House Rent Allowance. The variable components are Performance Linked Pay(linked with production volume & monthly profitability) & Productivity Linked Pay(linked with production volume only.
I believe, this is the best possible combination of a manufacturing industry.
10th November 2006 From India, Gurgaon
I remember if the employee submits bills for the amount claimed against conveyance allowance (reimbursement), then the same can be claimed for tax deduction. Also, for lunch allowance, we can give food vouchers / food coupons to allow for tax deduction for that amount.

10th November 2006 From India, Hyderabad
Dear all
We know that contribution of PF is applicable on leave encashment,leave availed by an employee during the tenure of his service. But what about the unavailed leave wages/salary paid to a separated employee on his final settlement ??
Please make me uderstand the logic and the rules under EPF & MP Act, if any.
10th November 2006 From India, Gurgaon
Hi, Could you pls help in what is the max amout in thes components. I hope good ending from your side. Regards, P.S.Phani.
11th November 2006 From India, Bangalore
Hi !
The percentage is fixed. However, there is no limit for the right employee in the right position. As I spoke, Performance is the only yardstick- I mean both individual & corporate. For an exceptional performer sky is the limit.
Hope you understood my points.
11th November 2006 From India, Gurgaon
Would be thankful if you are able to share the concrete information after your meting with CA as i am also in the process of re structuring the salary structure in my organization.
28th November 2006
what are the components of salary in a non profit organization in India? What is the salary administration structure for non profit organization?
4th January 2007 From India, Hyderabad
hi,,, im doin my final yr project. i hav plans of doin a proj in compensation.. can anyone suggest some good topics in this area.. the duration is 4 months... thank u :) regards, samyuktha
4th January 2007 From India, Madras
Hi All,

Let me try and give you an idea about components of salary

1) Basic - 35 to 40 % 0f gross (taxable)

2) HRA - 40% of basic ( incase of metro cities 50% of basic) ( exempted from tax incase the employee gives rent receipt at 10% of gross annual income or as defined in salary and as per receipts produced)

3) conveyance = 800 per month (800* 12 = 9600 p.a.) (exempted from tax)

4) Medical Reimbursement = 1250 per month ( 1250* 12= 15000 p.a.)(exempted from taxable income)

5) LTA = 1250 per month (1250* 12 - 15000 p.a.)(can be exempted from tax twice in block of 4 years)

6) Meal allowance (cannoned be more than 65Rs per day so 16250 p.a. if 250 days working.

You can put the remaining amount in Special Allowance ( whole of it is taxable) or account for in other allowances such as uniform allowance ( upto 10,000 p.a.)(not taxable), Internet access allowance, phone allowance, professional enrichment allowance,entertainment allowance, City compensatory allowance(20% of basic)(Taxable) etc.

Then in case there is PF deduction:

1)Employers contribution of PF = 12% of basic + DA( 8.33% in FPF (family pension fund) + 3.67% in EPF)

2) Employees contribution in PF = 12% of basic +DA (all in EPF)

In case the gross salary of the employee is less than 10000 then he comes under ESI. Incase ESI is applicable in the organization then

1) Employee contribution to ESI = 1.75% of salary

2) employers contribution in ESI= 4.75 % of salary

tax slabs

0 - 1,00,000 = 0%

1,00,001 - 1,50,000 = 10 %

150,001 - 2, 50,000 = 20%

2,50,001 onwards = 30%

Neha :)
26th February 2007 From India, Chandigarh
hi all! What are taxable benefits and no taxable.please break up components TAXABLE-NON TAXABLE yours kumar
26th February 2007 From India, Hyderabad
What are the guidelines for calculating BASIC, DA, HRA, Conveyance Allowances in Salary fixation to a new employee
18th April 2007 From India, Mumbai
Hi to all,
Please add deduction factors too. This is also a components of salary. I am mentioning few
1) Employees Provident Fund
3) Profession Tax
4) Labour welfare fund
5) LIC (if attached to salary)
This is general deudctions, hopes other members will add more..
20th April 2007 From India, Nagpur
well my current package is 2.5 lakhs as i am a fresher,but my take home is less.the rest amount goes in superannuation,medical reimbursement ,ltc,etc.
so i want to know that is it possible for my company to include that medical benfit within the range of rs 15,000 as a part of salry and is it possible for superannuation also and wil it be taxable.plz help me coz i have been asked to restructure the ctc of my company.
5th May 2007 From India, Bhubaneswar
Hi all,
Nice to read all from you. I have one query. Is it mendatory to put HRA as a component of salary. We want to remove this component from the salary break up, but one of my good friedn is saying that it is mendatory to give minimum 5% of HRA as a component of salary?
Can you please help me out?
Thanks & regards,
Bibek Banerjee
2nd June 2007 From India, Calcutta
Hi Expertisee’s, Can anyone please let me know what are the tax percentage and tax limit amount for all the salary component list..... Regards, Suresh Gopu
21st December 2007
hi taruna
Basic ( 40 %)
HRA (50% or 40% as case may be)
Medical Allowances
Conveyance Allowances (800pm max)
Special Allowances:( yes it is fully taxable if it not specified, it is only exempt under section 10(14) to the extent the amount is utilised for the specified purpose for which allowance is received.
Hope this is clear
Manager - HR
30th March 2008 From India, New Delhi
hi taruna
Basic ( 40 %)
HRA (50% or 40% as case may be)
Medical Allowances
Conveyance Allowances (800pm max)
Special Allowances:( yes it is fully taxable if it not specified, it is only exempt under section 10(14) to the extent the amount is utilised for the specified purpose for which allowance is received.
Hope this is clear
Manager - HR
30th March 2008 From India, New Delhi
Rs.15,000 medical reimbursement is non taxable to the employee if bills are produced but at the same time company has to pay FBT on it.
3rd April 2008
hi i have doubt on LTA. is it up to 15000 pa is nontaxable or actuals incurred in 2 journeys in a block of 4 years. plz reply ,,.. regards, gaurav
6th August 2008 From India, Vadodara
Hello everyone,
I am a fresh HR working for a software service provider start up company.I have to configure payroll for my company.can anyone tell me what are the components that i shud include and plz.let me know the important calculations also.
Arpita kapoor
8th January 2009 From India, Pune

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