Accounts & Finance
Freelancer Recruiter
Safia Zaidi
Manager Hr
Hr Executive
+2 Others

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Please help to understand standard salary structure or component of salary and how to prepare salary of a new joinee if given.
Dear Safia Zaidi,
Various companies have a different kind of salary break- up structure. However, here are the components for your reference.
Basic = 40 - 50% of Gross
HRA = 40 % on basic for Non- Metro and 50% basic for Metro cities
Conveyance allowance = Max. upto Rs. 800 Per Mensem and 9600/- Per annum
Medical Reimbursements = MAx. Rs. 1250/- per mensem and 15000 P.A
Special Allowance = Balance of the Gros is calculated as the spl. allowance
Apart from the above you need to look for statutory contribution
1] ESI (applicablefor employees whoe gross salary is less than or equal to 15000/- per mensem).
Employee Cont. - 1.75% on gross
Employer Cont - 4.75 % on gross
2] PF = Employee Cont - 12% of basic
Employer Cont - 13.61% on basic
As the professional tax is conerned it differs from state to state.
For a New joinee you can always prepare a salary by
- Net salary = Gross minus PF (Employee Contribution) minus ESI (Employee Cont.)- Professional Tax
- CTC = Gross + PF (Employer Cont.) + ESI (Employer Contribution)
If the salary of the employee joining you is highly paid then, you may also use the spl allowance that is to be paid through,
Petrol allowance, food coupons, LTA etc.

I agree with Sharmila. She has mentioned the best break up options for a fresher salary.
There are also some online tolls available to get the slary break ups. You can search for them on Google or use take home salary calculator for India.
The calculator works in the reverse way i.e. you have to enter the basic, Hra and other values and it will show you the CTC and take home values. You can use it for your purpose of creating the CTC letter as well

Hello Safia Zaidi Sharmila das has explained nicely. I am just attaching sheet which contains breakup of salary and you can calculate TDS also.

Attached Files
File Type: xls Salary Breakup alongwith TDS working and Computation A.Y. 13-14.xls (45.0 KB, 5550 views)

why conveyance is Rs.800/- per month and medical Rs.1250/- per month ?
-- Because these amount are exempted from Income tax.
Both of these amounts may be fixed at a higher rate. There is no hard and fast rule to fix these two amounts.

Dear Sharmila, That was informative , but what if the salary is given in CTC ...then how can we make the breakup ?..pls suggest
Could someone share revised AP minimum wages on OCT’2012? It’l would be help to freshers .
ESIC Countable on Gross Salary,It includes Basic+D.A.+Allowances (All Allowances Except washing Allowances)
Dear Mr. Greek John,
For the CTC, it needs to be Gross salary i.e; (Basic+ HRA+ Conveyance+ Medical Reimbursement+ Special Allowance) + PF (Employer's Contribution) + ESI (Employer's Contribution).

Dear Seniors , I am good with salary components . I need someone help for salary fixation , how do we fix salary for employee ,i.e sales man?

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