Sahil0007
Head Of People Relations
Rachit.nirmal
Recruitment, Client Relation, Hr
Vineetpandey88@yahoo.com
Sr. Executive Hr
Vidhi1307
Hospitality & Hr
Pon1965
Construction
Sdas_80
Manager - Hrd
Smitavaity
Human Resource
Gupta830
Administration
Nareshrateria1959
Accounts & Legal
Haris.aleeya66
Communication,soft Skill And Interpersonal
C S SHUKLA
Human Resource
+8 Others

Thread Started by #hunk9858

Dear Members
I don't know anything about ctc calculation tomorrow my boss give me acalculation sheet for en employee the sheet describe Total monthly ctc 24495
In hand salary Basic 11000, hra 5500, conveyance 3000, medical 1500, other 1500 total in hand salary 22500. is this correct? What is the actual procedure to know ctc
16th May 2011 From India, Delhi
restrict conveyance to Rs.800/- p.m (I.T. exempted) and medical - Rs.1250/- p.m. (I.T.exempted on production of bills). pon
16th May 2011 From India, Lucknow
Dear Member,
Usually the calculation of the CTC is as follows..
(1)Basic :35-40% of gross salary
HRA - 40% of Basic
Conveyance : Rs .800 (Fixed) -tax limits
Medical :Rs. 1250 (Fixed) - tax limits
Special allowance - Balancing amount
Total of (1) constitutes - Gross Fixed
(2) Gross benefits like - PF - 12% of Basic & DA
Gratuity :5% of basic & DA
Lunch
Insurance
LTA
Total of (2) constitutes - Gross Benefits
Sum total of (1) & (2) constitutes CTC
Regards
Sunil
16th May 2011 From India, Bangalore
Hi, Sunil is correct but gratuity will 4.81%. Then Deduct professional tax and income tax according to the prescribed slabs.
16th May 2011 From India, Madras
Dear Maestros, Pls make CTC more clear and ellobrate with example so that it will be easy to understand each and every thing clearly. Thanks and Regards Nitesh Ajmera
16th May 2011 From India, Bangalore
Calculation of CTC is right but you have to check with formula given by Sdas that is the calculation.
17th May 2011 From India, Mumbai
ctc is the cost to company and includes all other components like LTA, medical, pf , fuel reimbursement, books and periodicals etc..
17th May 2011
Dear Mr. Sunil,
The calculation of CTC given by you is good but I need clarification on some points pl.
1) The %age of HRA, medical & conveyance etc. varies according to grades such as Assistants, Officers, Sr. Officers, Managers etc., in such cases what would be the %age of basic.
2) Some companies do not provide benefits like LTA, Lunch, Insurance etc., and in such cases how to calculate CTC.
3) Will it be right to consider Gratuity as part of CTC because any employee becomes entitled for gratuity after continuous service of 05 years and if he leaves company earlier to this period, he will lose this portion of his salary.
Regards.
CS SHUKLA
17th May 2011 From India, Lucknow
CTC is nothing but your COST TO THE COMPANY.
IT INCLUDES YOUR
A . MONTHLY PAYAMENT IN CASH i.e. BASIC PAY + DEARNESS ALLOWANCE (IF ANY) + HRA + CONVEYANCE ALLOWANCE + MEDICAL ALLOWANCE + LTA + OTHER CASH ALLOWANCES
B. GRATUITY PROVISION + EMPLOYER'S CONTRIBUTION TO PF (icluding administrative & other charges to PF) + EMPLOYER'S CONTRIBUTION TO ESI + FREE MEALS DURING OFFICE HOURS + ANY OTHER FREE FACILITIES ALLOWED BY EMPLOYER DURING THE COURSE OF EMPLOYEE WHICH CAN BE CALCULATED IN MONETARY FORM.
COST TO THE COMPANY FOR A EMPLOYEE IS A + B. WHEREAS THE EMPLOYEE WILL GET TAKE HOME SALARY AS "A" MINUS CONTRINUTION TO EPF & ESI.
17th May 2011 From India, Coimbatore
Hi every one,
Dont get confused.
Salary calculation per annum
1.Basic will be 40%of ctc
2.HRA will be 50%(50% for metropolitan/40%for rural) of basic.
3.conveyance will be Standard 9600
4.Lunch allowance will be 12000(if ctc s below 3.6L)/24000(if ctc is equal and above 3.6L)
5.LTA will be 12000(if ctc s below 3.6L)/25000(if ctc is equal and above 3.6L)
6.Pf will be 12% of basic
7.Gratuity will be 4.81% of basic
8.Speciall allowance is the balance amount.
Example:Per annum
ctc basic hra medical conveyanc speciall gratutiy Lunch LTA Pf
562500 225000 112500 15000 9600 113577.5 10822.5 24000 25000 27000
I hope now you all will be clear
17th May 2011 From India, Madras
Dear Every One, I think every think is right but the calculation of Gratuity(Monthly Rated Employees) is as follows:- I am wrong please clear me. Regards,
17th May 2011 From India, Bhubaneswar
Dear All, Some companies are calculating Leave as part of CTC. With regards, Sameer K Ghosh
17th May 2011 From India, Daman
which way of calculation is appropriate 1-basic-100%, hra-33% of basic, medical-10% of basic ,pf-12% of basic so on and so forth or calculation from gross salary as source of calculation.
17th May 2011 From India, Calcutta
Dear Mr Hunk,
Attached herewith a salary beakup for your further reference...... you can add/delete accordingly according to your company policies and procedures
Thanks and regards
Ravibhushan Pandav
Human Resources Officer
9970967623
17th May 2011 From India, Pune

Attached Files
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File Type: xls ctc calculation.xls (13.5 KB, 602 views)

Dear All,
Every company has different percentages and componants for constructing a CTC,The method of construction for some ctc for some companies is such that they do not add much into their basic as the employer contribution increases.I have posted a CTC construction according to my company policies.......... comments are highly appreciated
Thanks and Regards
Ravibhushan Pandav
Human Resources Officer
9970967623
17th May 2011 From India, Pune
Here i am sending you the calculation on monthly basis.
CTC(cost to company - which includes everything, both part of PF and all other allowance, Insurance etc..)
Basic: 45% of CTC
Transport Allowance: 800 FIX
HRA : 37.50% of CTC
PF: 12% of Basic
Professional TAX: 20-200.. based on Salary
Insurance: if any
example:
CTC = 20,000
Earnings:-
Basic = 9000 (45% of CTC)
Transport Allowance: 800 FIX
HRA = 7501 (37.50% of CTC)
==================
Total = 17301
Deduction:-
PF = 1080
Professional TAX = 200
Insurance = 330
================
Total = 1610
Net Amount = Total Earning - Total Deduction
= 17301-1610
= 15691 Rs in Hand.
now here the insurance amount can be differ based on plan selected, number of person cover etc...
17th May 2011 From India, Ahmadabad
Gratuity is never considered as a part of CTC as it is pais only after the completion of 5 yrs, and an employee may leave before 5 yrs.
18th May 2011 From India, Mumbai
Thanks Ravibhushan, Can you pl include the gratuity component in the excel sheet that you have provided? Or, else, tell us where it is to be inserted, Thanks Anand
18th May 2011 From India, Pune
I want to get into Indian Payroll. I have been looking out for frens who can really teach me how payroll works.
My knowlegde so far:
Basic: 35% of Gross PF: 12% on Basic
HRA: 50% of Basics PT:400
Coveyance:800 fixed
Medical: 1250 fixed
Balancing amount:---
Hope this would do. I dont know what gratuity is? and other elements in Payroll. Kidly assist me
18th May 2011 From India
Dear Shukla,

The compensation & benefits is a wider topic and the person, who needs to chart out the salary structure demands the knowledge of income tax, inorder to draw the tax friendly structure.

1. The % of HRA should be directly proportionate to the Basic. obviously, if the person gross salary is higher, then the HRA also increases - in the above thread, i have clearly stated as 40% of basic & DA.

As per IT Norms, salary for this purpose include Basic & dearness allowance.It Excludes all other allowance and perquisites. hence we take into consideration only Basic & DA for the purpose of allocating HRA. above 40% of HRA is taxable as per the IT norms. (Refer below other cities)

The IT Rules for HRA is as follows.

the place where the residential accommodation is divided in to

(a) Major cities - (Bombay, calcutta, delhi & Madras)

1 Allownace actually recieved

2 Rent paid in excess of 10% of salary

3 50% of salary

Note : Exemption admissible least of 1,2,3)

(b) other Places

1 Allownace actually recieved

2 Rent paid in excess of 10% of salary

3 40% of salary

Note : Exemption admissible least of 1,2,3)

2nd question :

The Cost to company - as the name only suggests, the total amount spent by the organisation on the respective employees.

if they are not given by them, then no need to include..you can just include PF, PT, Gratuity.. i hope this three applies to all the companies- take only those factors which applicable to the company and draw the CTC.

3rd Question :

Inclusion of Gratuity in the CTC is a debatable question. Compensation & Benefits experts demonstrate the same in different purview. but here in our organisation we include on the basis of below fact.

The employee once completes one year of service, you need to start paying the gratuity amount of the respective employee, hence its the cost beard by the company - even though the employee might receive the same after completion of continuous five years of service.

Simple justification - when we are including in the CTC - employer contribution to the Provident fund, why not gratuity ?.

FYI, this depends from company to company. hence you have a option, whether to include or not to include.

Cheer's

Sunil.
18th May 2011 From India, Bangalore
Dear Anand,
As rightly said by the senior members,Gratuity is not considered to be a part of the CTC as gratuity is applicable to a person only after he completes five years in the organization........... the gratuity calculation can thus be written separately for the employees understanding.
Thanks and Regards
Ravibhushan Pandav
Human Resources Officer
9970967623
18th May 2011 From India, Pune
Hi... i think this will help you out
SALARY BREAK UP


GROSS SALARY BASIC H R A CONVEYANCE OTHER ALLOWANCES
8001 AND ABOVE 40% 10 % OF GROSS 800 REST AMOUNT
7000 TO 8000 50% 10 % OF GROSS 400 REST AMOUNT
6000 TO 6999 60% 0 0 40% OF GROSS
5000 TO 5999 70% 0 0 30% OF GROSS
4000 TO 4999 80% 0 0 20% OF GROSS
3600 TO 3999 90% 0 0 10% OF GROSS
BELOW 3599 THE STAFF WILL BE KEPT AS A CASUAL STAFF
18th May 2011 From India, Indore
Urgent answer to this question required:
Can LTA be provided on a monthly basis as part of the salary structure or is it supposed to be given quarter wise or smthng??? Please throw some light on this too...
18th May 2011 From India, Delhi
Dearest Vidhi,
Yes LTA can be shown on a monthly basis as a part of the CTC when your constructing it..................! But LTA cannot be given on a monthly basis,it is given on a Yearly basis after an employee completes one year.
1months basic = LTA.I hope you have got your answer.
Thanks and Regards
Ravibhushan Pandav
Human Resources Officer
9970967623
18th May 2011 From India, Pune
Dear Mr. Pandav
Thank U so much for your inputs. Can u help me with making a tax friendly salary structure and what all components can I introduce in it other then Basic,HRA, Conveyance Allowance, and Medical Allowance.
Waiting for your suggestions
Regards
Vidhi

18th May 2011 From India, Delhi
Dearest Vidhi,
According to the requirement of the company and the designation for which we are constructing a salary depends upon the top management of the company.........There r 2 possibilities 1) either the company has a fixed salary structure for individual grades existing or 2) The company produces a salary structure according to the capabilities,qualifications,experience and skills of an individual......
So a Low tax or a Tax free salary structure is not possible,u cannot provide an experienced person low salary only because of the reason that u will pay less tax or no tax............! tax is applicable for an individual if his/her annual income is more than 1,80,000.........! so anyhow the individual has to pay tax depending on his salary.............! So i will request you to please remember that you can only reduce on companies share of statutory compliances which it pays for its employees and not on tax........! yes......! as far as an individual goes he will definitely find ways for tax exemption on his personal means which is that individuals problem afterall..............! i hope i have answered your question satisfactorily.
For any further clearance and queries plz stay in touch.

Thanks and Regards
Ravibhushan Pandav
Human Resources Officer
9970967623
18th May 2011 From India, Pune
Dear Mr. Pandav,
Thanks again for clearing the doubts, yess Income tax is a given which the employee has to pay however I would like to know other than (previously said) salary components wat other allowances or factors can I introduce in the salary structure.
One more query what is special allowance and personal allowance, Is there any income tax levied on them, if yes then how much is it... on what basis is it calculated.
Regards
Vidhi

18th May 2011 From India, Delhi
Dearest Vidhi,
Income Tax is levied on your total Gross Earnings Per annum.........! so it is not the componants of the payroll which are taxable,It is the total Gross Earning per annum which is..........! The salry structure can have the following componants.
Basic,DA,HRA,Conveyance,Special Allowance & Personal Pay
Hope i have answered your questions to your satisfaction.
Apart from that if u want to construct a CTC please also add PF,ESIC,Uniform,Telephones,LTA& Medicals to the Salary Structure to get the final CTC.
Thanks and Regards
Ravibhushan Pandav
Human Resources Officer
9970967623
19th May 2011 From India, Pune
Tax is not on total gross earnings but on taxable gross earnings. Some components like HRA (rent paid in excess of 10% of basic as applicable to metros and non-metros), CEA, Medical Assistance (subject to production of bills), Conveyance allowance are set aside from the total gross earnings while calculating the taxable gross earnings.
pon
19th May 2011 From India, Lucknow
Dear Mr Pon,
Please read my explanation once again........! i have stated Total Gross Earnings Per Annum.No componant of the Salary Structure is taxable on an annual basis,but gross on an annual basis is taxable..............! please make sure LTA,Medicals and other allowances if claimed once in two years does not incur tax at all..........!
For any further assistant plz be in touch
Thanks and Regards
Ravibhushan Pandav
Human Resource Officer
9970967623
19th May 2011 From India, Pune
Dear Mr. Pandav, Many thanks for your valuable suggestions, will construct the ctc as per said suggestions. Looking forward to similar help in the future. :) Regards Vidhi
19th May 2011 From India, Delhi
Dear Mr. Pon, Thank you for providing inputs. Plz keep me posted on any new information on the same. Will look forward to clarification of any doubts in the future. Regards Vidhi
19th May 2011 From India, Delhi
Pandav,
Only LTA is tax exempted if claimed twice in a block year of 4 yrs (subject to production of air/train/bus tickets for family and dependents). Not all other allowances. I am paying Rs.60k per month as Income Tax and made thorough analysis of I.T. exempted components.
pon
19th May 2011 From India, Lucknow
Dear Mr Pon
I will definitely discuss the above matter wid my General Manager Finance and get myself updated............! i wont comment unless and untill i come through a conclusion and get this matter cleared...........!
Thanks and Regards,
Ravibhushan Pandav
Human Resources Officer
9970967623
19th May 2011 From India, Pune
Hello Seniors can you tell me the actual procedure to count working days in a month. how many present in a week are Compulsory to get Sunday benefit.
23rd May 2011 From India, Delhi
in my company only pf & ESIC (12%&4.75%) given by employer only in CTC Calculation. Ravindra
24th May 2011 From India, Bhopal
Hi seniors,
Can anyone guide me on what CMMI is and how can it be implemented in a start up organization so as to automate Admin and HR processes as well as can be used for Employee communication.
Which all factors can be considered as a part of its content for a young IT company as it is to be used by employees and management alike.
Please advise and if possible, any formats will be appreciated if it helps.
Regards
Vidhi
24th May 2011 From India, Delhi
dear
ctc is cost to the company
ctc componet is
1. montly gross salary 2. anuual benefit e.g LTA , MRB, Bonus , 3. Retirement Benefit like pf , gratuity
Regards
Jagan Sonawane
Payroll Manager
Svizera Healthcare
904206487
15th June 2011 From India, Mumbai
Dear Mr. Sonawane, Though I am not going to use it but just for your information the contact no. u provided is incomplete.. Pls take a look at it.
16th June 2011 From India, Delhi
Dear All,, Kindly make the Calculation more elaborate along with the deduction part also...Then it will be very helpful..............
16th June 2011 From India, Madras
Hi
We are reimbursing below mentioned expenses to our employee's on producing actual bills - :
Rs. 180000/- p.a. as Petrol & Fuel
Rs. 180000/- p.a. as Driver Salary for car owned by employee used for office purpose
Rs. 60000/- p.a. as books and periodicals
Rs. 60000/- p.a. as Entertainment allowances (Restaurant / Food Bills submitted by employee)
The above component is debited in the company books under the head of Salary & wages.
Is the above component taxable as perquisite and is the company liable to deduct TDS on the same or it is tax free.
Thanks & regards
Shailesh
99300 90601
14th March 2019 From India, Pune
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