Head - Outsourcing
Entire Organisational Matters
Practicing Chartered Accountant
Senior Hr Manager
Hr & Admin
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Asso.prof.(commerce & Management) Pg
Sushil Sharma Gd
Nvr & Associates Ltd
#AnonymousDear Giridhar Sir,
Thank you so much for your support.Sir do suggest me under what head/column that I should be adding F&A in the payslip.
Sir If you have an proforma of the payslip which includes Food and Accommodation please provide me with that
Thanks and Regards
17th January 2014 From India, Eluru
Why do you want to show a benefit as a part of the salary ? Have you discussed how this expenditure by the company can come under fringe benefits, if declared with the salary ?
If your firm is offering a benefit or 'a non-cash reward' , why include it in the payslip ?
If you want to share the investment your firm is making on each employee , you might want to do it differently.
Here's my experience from a firm which used to claim the accommodation. We literally asked the firm to pay us the amount than making us stay where we didn't want to .
Same is the situation with the IT/BPO firms declaring the deductions for company transport . The employee may choose not to take it , but avail the amount. This may not easily reflect as a loss , but try and think this in the long term . Imagine the firm spends X amount on transportation. If few employees, claim money , that doesn't help the firm to take the transportation away . They still will have to spend and bear the cost . An incremental difference makes literally no sense while managing a very huge roster, for the rest of the firm.
I am certain you have considered every repercussions before implementing it .
17th January 2014 From India, Mumbai
Exactly my sentiments !!!!
I do not understand why Mr. Feroz wants to show an INFLATED salary slip; when the employees are NOT getting even the MINIMUM WAGES ???
On one hand he is saying FOOD is FREE; and on the other hand, he intends to show it in Salary Slip ??!!!
The accommodation has been given; FOR THE CONVENIENCE OF THE MANAGEMENT and not the employee's.
Even then, the accommodation costs Rs. 6500 and the salary is a PITTANCE at Rs. 4500.
He has not given the details of the company; its business or employees. But such scenario is prevalent in many unorganized sector; such as BRICK KILNS; CONSTRUCTION etc where FORCED LABOUR is prevalent.
Or, in TEXTILE/Garment industries which are run as "SWEAT SHOPs" meant only to exploit manual workers.
These constitute a NIGHTMARE for a conscientious HR; an HR with a conscience !!
What is reflected from the query, how to include FREE food and accommodation, in the Salary Slip; is a clear reflection and indication of this malaise.
Once you INCLUDE these amounts in the Pay Slip; and an employee says that she (most likely a Female employee, as evident from the case) does not
want to avail of the company food and accommodation; then ARE YOU WILLING TO PAY IT IN CASH ??
Hope you have got enough information from the comments of seniors; to understand the issue and proceed accordingly.
In any case, here we do not give suggestions or solutions to an issue which can be construed as UN-ETHICAL and UN-PROFESSIONAL; as well as appears to be illegal (in case Minimum Wages Act and EQUAL REMUNERATION ACT; are not being complied with).
Hope, you will be able to explain to the company owners accordingly; just as an honest and upright CA/Company auditor or Internal Audit; is able to PUT UP ITS POINTS to the Management.
18th January 2014 From India, Delhi
18th January 2014 From India, Kumbakonam
#AnonymousThank you so much seniors for helping me out and with lot of your time and effort.I would raise the same to my boss because I am just an employee not an employer. With Regards Feroz
18th January 2014 From India, Eluru
By treating in which manner, who will get the benefit.
If tax reduction for company than treat differently if tax benefit to employees than treat differently.
Being a business organisation, concentrate on cost part rather than heading and all.
19th January 2014 From India, Bangalore
Re.Fringe benefits, subject to the exemptions, whether shown included in the salary or stated separately under diff. heads these exp. gets added but still the FBT is payable, if applicable (as it is abolished in 2009 in the hands of employer)
"The Indian government abolished the Fringe Benefit Tax (FBT) as part of its 2009-10 budget on 6 July 2009. This amendment, which shifts the burden of taxation on fringe benefits from employers to employees, will come into effect on 1 April 2010.
Fringe Benefit Tax was introduced in the 2005-06 fiscal year as a tax paid by employers on the portion of employee benefits not included within an employee’s salary. This included entertainment, gifts, concessional tickets for private journeys, employee stock options, etc.
As a result of the amendment, however, fringe benefits will now be taxed as perquisites and treated as taxable income. Employees will also be taxed on any sweat equity shares they own (shares given to employees on favourable terms), or employee stock ownership plans they participate in. They will also be taxed on any contribution in excess of INR 100,000 (USD 2,075) to an approved pension fund made by plan sponsors on their behalf."
In some firms the employer pays some Taxes incl. IT & FBT for and on behalf of the employees also.
19th January 2014 From India, Bangalore
It's obvious employers provide various perks either among the salary or outside the salary, some such perks are as follows:
1. Free or subsidised food either in the Canteen or thru' food coupons, (sodex etc.)
2. Free or subsidised transport
3. Free or subsidised houses/quarters
4. Free or subsidised provisions and house hold articles, vehicles directly or thru' employees' societies
6. Interest free or at concessional interest
7. Allowances towards maintenance of houses, furnitures, vehicles, gardens/house maids, news paper/magazines, fuel subsidy
8. Supply of clothing (hilly regions) and remote allowances depending on the location of work places
9. Allow. for higher studies and specialised training etc.
Imagine all or some of these perks are added as a part of salary in monetary terms and its impact on the inflated gross salary, its consequences in computation of PF/PT, ESI, Gratuity, Bonus, leave encashment and employers' & employees' contributions towards these and ultimately the impact of personal IT. In fact the subsidised/free food and transport have no direct impact on personal IT whereas when these are converted as part of gross salary either thru' 'contra' or by other methods would spell unbearable burden on either side. So think it over from all angles and take a decision.
22nd January 2014 From India, Bangalore
Also note the following for your TAX planning:
TAX FREE PERKS U/S 17(2):
Medical benefits provided by the employer in their hospitals/clinics.
Tea and snacks or free food or beverages provided in office or factory or through paid vouchers which are not transferable and usable only at eating joints
Facilities of motor cars
Residential accommodation provided at site
Facilities of club or health club and similar facilities
Expenses on telephone including mobile phones
Employers contribution to staff group insurance scheme
Scholarship to employees or their children paid by the employer
Facility of guest house or holiday home
Free ration to Armed Forces Personnel
Perquisites to government employees posted abroad
Certain perquisites to High Court and Supreme Court Judges
Rent free houses to certain persons
Laptop and computers provide by the employer for personal use of employee
Interest free or concessional loan if the aggregate dose not exceed 20000 in PY
Periodicals and journals required for discharge of work
Leave travel concessions as per terms and conditions
Free food- Sec.3(7)(iii)
Gifts - Sec.3(7)(iv)
Credit card facilities – Sec.3(7)(v)
Club facilities- Sec.3(7)(vi)
22nd January 2014 From India, Bangalore
Your situation seems to be in confusion. All the esteemed members suggested a correct & appropriate view in your case. Food and accommodation not to be included in the payslip.It may be in CTC for reference purpose. I hope you can understand the whole idea for not including the F&A in salary slips of your employees.
1. Your company will get the Tax benefit for the food and accommodation provided to the employees under welfare-employees.
2. Then showing in the payslip will create further more problem. Once the company takes the advantage of reduced tax and the employees will get levied with the fringe benefit tax is not acceptable.
3. This thing will be against the employee and it will lead to more attrition rate in your company.
4. As a HR you must take care of the benefit of the employees and you are the representative of the employees to take up the issues with management.
So act amicably discuss this issue with your management stating the pros & corns of the issue.
22nd January 2014 From India, Gurgaon
Even in our company also we are providing free food, accommodation and transportation but we are not showing in the payslip.
Better check your minimum wages what you are paying?
Thanks & Regards,
23rd January 2014 From India, Bangalore
Could you help me by answering the following question?????
(1) What are monitoring methods for Payroll activities??
(2) What do you do to stay current with provincial, federal, state, municipal regulations?
(3)8. How to measure/appraise your Payroll…position?
please help me out
24th January 2014 From India, Hyderabad
25th January 2014 From India, Mumbai
Is it possible that few reimbursement (fully tax exemption) should reflect on slip so that employee can't confuse at all?
should I add, food coupon, Telephone bill etc and reflect it on salary slip. (Our most of employees are millennials)
1. Uniform Allowance:
2. Mobile / Telephone Reimbursement: monthly cap normally of Rs 2000 per month. Please note that reimbursement can be claimed only for Postpaid Connections.
3. Children Education Allowance:
4. Children Hostel Allowance: You can claim max Rs 7,200 p.a. for 2 children.
5. Soft Furnishing Allowance:Max reimbursement is limited to justify the same. For Mid-Managers, Soft Furnishing Reimbursement is restricted upto Rs 50,000 depending on the salary of person. The reason for soft furnishing reimbursement is that employee need to entertain guests at his residence for official purpose and expense incurred to protect office furniture at residence.
6. Newspaper, Books and Periodicals: cap the max limit to Rs 1000 per month.
7. Reimbursement of Conveyance Expenses:
8. Daily Allowance:
9. Research Allowance: Any amount spent & reimbursement claimed by employee for academic research or other professional pursuits including training, short term / online course etc. is fully exempted from income tax on production of actual bills.
24th April 2017 From India, Mumbai