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Hi, :?: Incentives is part of Gross Salary????????????? :?: If "YES" then Why??????????? Awating for clarification...
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Please clarify what u mean by gross salary do u mean CTC or monthly salary without deductions....
Dear Soma,
Many organisations have incentives as a part of the CTC but the pay out may vary. Computing incentives monthly is a big struggle and so they can be paid out quarterly/ six monthly/ yearly.
Well you can include the incentives as part of the CTC but make sure you make a note about the pay out duration to avoid issues.
Salary may or may not be the part of gross CTC.
1. May Be
1.1 : When it is given on performance basis (PLI)
1.2 or in the form of bonus.
2. May not be
2.1. When it is given on product basis eg if you sell or deliver this qty you will be given x amount. Like in sales employees get on the basis of their sales.
Hi, Incentive in any form is considered an earning as per provisions of Income Tax Act , hence taxable whether you consider it as a part of CTC or not. Regards, Rajpal
Yes incentive is a part of gross salary may be it is an production incentive or may it be an attendance related incentive .
Incentives are part of Gross salary only, if they are not paid in once in three months. then this incentives not part of Gross salary. If you paid incentives per month then its part of gross salary. Also ESIC is calculated on gross salary.
Nilesh Mhaskar
HR Executive
Some organizations, esp. financial sector, do not have the incentives as a part of the CTC. The incentives are over and above the CTC and purely performance based.
If, the incentives are a part of CTC as mentioned in the appointment letter, then the time of payment (yearly / quarterly) should be clarified.
Incentive is not a part of Gross Salary.
First of all one has to understand there are two terms used in Salary part
-Fixed CTC & Variable CTC
Fixed part consists of Gross Salary and other benifits given by Company like PF contribution, Gratuity, Superannuation.All these make Fixed CTC.
Variable CTC is ment for the performance incentive / incentive that is purely based upon the performance and varies as based on your performance .
Hope you got your doubt clear :!: :D
Rachna Sinha
I believe that Incentives are paid for better performance.
Though it is taxable at the end of employee, it can not be considered as part of gross salary, though it should be considered as part of CTC. Pls also note that certain Acts e.g. ESI, are applicable on gross salary. Ading incentive to gross salary will only increase the burden on employee as well as on employer.
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