Saswatabanerjee
Partner - Risk Management
Suresh2511
Labour Consultant
Latabatheja
Hr & Operations Manager

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Hello, I am working in a company where till now we had flat salary structure i.e., Basic was fixed and we had Net take home as salary. And now the company has changed to CTC structure, when there is an Increment time, we are getting it that your Increment would be your Gross Salary. It Means if my Current Salary is 20000 PM and now if i get hike of 3000, it would be 23000 Gross, from which PF, Monthly Bonus, and if ESIC is applicable, that would also deduct from the same.
Please help me what should we do in this case? How automatically take home take home can turn in to Gross?
Regards,
Lata

From India, Ahmedabad
Helo There,
can you clarify me deduction which was happened before your appraisal time. generally CTC is includes both of your deduction and Earnings and other benefits(Includes employer part). so Gross means part of Employees PF, ESI, PT.
So as per your above concern Gross pay is not your Take home. further speak with your immediate reporting authority or HR person.
Regards
Nijanthan C

From India, Chennai
There is no legal constraints on how much salary is to be paid ( what more then minimum wages) or on the components and the increments that a person will get.
Therefore, it is the decision of the management as to how much increment they will give and what is the components they will have in their salary. In general, however, no company will give an increment in a manner that reduces the amount of salary is the person takes home. If you have concerns about the revised structure, are you should talk to the HR all the owner of the company and get Your point across

From India, Mumbai
Hello Saswata,
At present i am getting taking home lesser than earlier, previously it used to be 20000 Salary and it was flat straight take home, only deduction of Rs. 500 was made, concerning, Mobile Bill 300 Rs. and Professional Tax 200 Rs. And now i have yet not got my deduction details but the salary received some where around is 18200 some thing.
Hello Nijanthan,
yes i am aware about the Net Pay/Gross/CTC structures, but as said above previously it was all flat only 2 deductions, Mobile and PT but now they have out of sudden changed structure and made our Net Pay as Gross.

From India, Ahmedabad
You need give us the details of the payslip The gross can not come down though the net / takehome can reduce on account of valid and legal deductions that were not there before
From India, Mumbai
What we can presume is your Gross salary is 20K + 3 K hike i.e. Rs.23,000/-

Less: Deductions:

PF 12% on Rs.15,000/- is Employee's Contr. Rs.1,800

PF Employer's Contr. 12+0.65+0.50%=13.15% Rs. 1,973

Prof. Tax Rs. 200

Mobile Rs. 300

Bonus Rs.7,000/12=Rs.583/- per month Rs. 583

_______________________________________________

Total Deduction Rs.4,856

Net amount Payable (Rs.23,000-4,856)= Rs.18,144

Your company must have calculated your salary in above manner. However, you can inform them to maintain your existing take home salary and request them not to deduct employer's PF contribution from your increased salary. You also inform them that the Bonus is payable annually and on the basis of Company's profitability, thus should not be considered as part of your salary.

If they do not accept the above tell them not to deduct any PF amount from your salary. Open a recurring account and deposit the amount of Rs.2000/- which your company is deducting as employer's share to PF

Suresh,

From India, Thane
If the working by Suresh is right, them it's illegal.
First, employers share of PF can not be deducted from salary
Second it is illegal to reduce salary of employee for paying emp,payers contribution of PF
Both are clearly stated in the act and rules

From India, Mumbai
Lata,

From your submission it appears that you are aware about Net Pay/Gross /CTC. If I explain the three items then Net Pay is Take home, Gross is monthly gross & CTC is Cost to to Company. As per calculation of Suresh Gross Pay and CTC have been considered as same. If your gross pay is 23000/- then your CTC will be more. Then from Gross Pay the deduction will be Mobile, PTAX, Employee's contribution of PF only ( no ESIC as your mnly gross is more than 21k). Obviously your monthly net salary (take home) will be more than 18200/- as you have mentioned. Your CTC will be Mnly gross x12 + annual statutory Bonus+ Employer's contribution of PF +Gratuity cost + any other cost as per your co's policy.

But if your CTC is 23000/-after increment then your monthly gross will be less than 23000/- and your take home (net salary) will be arrived after deduction of Employee's PF contribution + may be ESIC employee's contribution (if the mnly gross is less than 21k) + Mobile + PTax.

Actual calculation will depend on your Basic salary and consideration of 23k after increase as CTC or Mnly Gross. I am from Kolkata, WB.

Thanks & Regds,

S K Bandyopadhyay

USD HR Solutions

+9198310 81531


From India, New Delhi
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