Problem While Preparing The Salary Structure - XLS Download - CiteHR
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Srinath Sai Ram
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Jsurisetty
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Jyotsnashoknawar
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Dear seniors,
my company is new and i have joined as hr and facing a problem while preparing the salary structure.
kindly guide me with the below componets
BASIC/HRA/SPECIAL ALLOWANCE/ CONVEYANCE/MEDICAL / OTHER ALLOWANCE/ ESIC/ PF/ PT.
kindly help me to give the structure for 10000 to 500000(CTC)
your urgent comments are appreciated
regards,
jyotsna
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Hi Seniors,
My Name is Jagadeesh, I am also facing the same challenge as I dont have any experience in compansation design. can anybody let me know how to design a salary structure??
Thank You,
Jagadeesh.

Hi Jyotsna

Check whether how much amount PF is fixed (If the basic + DA) is Rs.15000 and above, PF can be calculated on Rs.15000 itself. If PF is calculated on full Basic and DA the allowances will decrease accordingly.

Basic fix at 40% on CTC

HRA 40% or 50% on basic (50% if your company is in Delhi, Mumbai, Chennai or Kolkatta)

Conveyance - Rs.1600 PM (if you provide car, then conveyance cannot be provided)

Medical - Rs.1250 pm

LTA - not fixed (but rules by Govt will become the limiting factor) You can fix at 1 month basic

Telephone - no amount fixed by Govt.

Car - Rs.1800 pm (if car CC is below 1.6. If more than 1.6 it is Rs.2400)

Driver exemption is rs.900 pm

You can also go for books and periodicals, uniform allowance, children education allowance, professional pursuits etc

ESI deduction - if Gross is 21000 and below

PF - I have explained you as above

PT - as per states slab.

Hope this will help you a little bit. (please go through income tax - allowances and deductions)

Regards

Mahesh.H.M.M


You cannot imagine things and go ahead as you like. First have a frank discussion with your bosses and try to know who are you, what are the aims and future plans, how and when you are going to take off etc. And importantly try to obtain a complete frame work, road map, fiscal & financial budgets atleast for the next 5 yrs if not for 10 years, without which your work will be meaningless. Draw appropriate charts and HR tree by which only you will get a clear idea as to how you can proceed. Likewise you should gain knowledge on the similar estt. existing in diff. parts of the country, abroad already running successfully. Future promises and growth opportunities (SWOT) etc. which will help you to exactly target at what. The charts and budgeting will determine how your man power should be read with financial budget. Discuss once your draft is ready with finance head before draw up your detailed man power planning.

Legally there is no fixed %age or quantum of salary and components of CTC except minimum ways, EPF, ESI contribution, Bonus (annual), gratuity. So you have to List out components of CTC, among them what is determined as lumpsum (a fixed amount) and what is directly worked on the basic pay/salary in terms of %. Better you should consult what is prevalent in your counterpart cos/sector/place. Then arrive at what is the quantum %age you are proposing and place it side by side.

First of all you have to bifurcate your components in to two - ie. payable in cash/cheque or bank credit (recurring monthly) which has direct bearing on take home money of employees such as basis, DA, HRA, Conveyance, incentive bonus etc. Then comes the other components which is not payable monthly (non cash costs) but forms part of CTC. Then there are other components which are either reimbursed on actual incurred basis like medical may be recurring monthly or thru' medical insurance/LTA (allowance paid monthly or annual or paid as reimbursed once in a block of 2 yrs or 4 yrs on actual incurred basis subject to grade wise slabs/limits prescribed as per your policy. Statutory bonus is an annual affair. There are components which are only due after retirement/separation like resignation, retirement or encashable while leaving such as EPF, Gratuity, leave encashment. All these are part of CTC. It is also possible as a part of revision all these, or some of these either in quantum or in terms of %age can be revised as per your thinking every year/ from time to time. A sample is given in the attachment which will give you some idea.

Attached Files
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File Type: xls CTC - sample OLD & REVISED.xls (30.5 KB, 103 views)

Please keep Minimum Wages applicable to your establishment as guideline for fixing basic/DA/VDA.PF Contribution to be on atleast Minimum Wages ESIC, PF, PT ,IT are all deductions from Salary
Dear Jyotsana,
Please refer the below salary structure for your referance.
Basic Salary (40% of CTC) (Full amount is taxable)
DA (20 % of basic salary) (Depends on company policy. Mostly taxable).
HRA (50% of basic) (Applicable if living in a rented house)
Medical reimbursement (Rs. 1250 p.m)
LTA (depends on company policy) (On submission of bills, exempt to a limit of certain sum)
Special allowance (depends on company policy) (taxable)
Food coupon (based on company regulations)
PF has two types,
1.Restricted PF =deduct on 6500/-
2.Non restricted PF =deduct on basic+DA
ESIC contribution,
1.Employee contribution =1.75% of basic+DA
2.Employer contribution =4.75% of basic+DA
ESIC deduction has two contribution period in a year.
PT deduction as per state wise.
TDS deductions depends upon laws.
Regards
Akanksha
Dear Akanksha,
PF ceiling limit has been enhanced from 6500 to 15000 Hence if basic plus DA is exceed the ceiling limit. The PF contributions may be restricted on 15000
Also as per section 2(22) of ESI act. 1948 ESI contributions shall be made on
Gross salary not on basic plus DA?
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor
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