Hi all,
In my company, they are calculating PF on the gross with a ceiling limit of Rs 15,000. They were asking me to do it in the format below, but I am not able to understand, and they don't have complete knowledge as they are blindly following their consultant. I tried to reach him, but he is not responding. The breakup is as follows:
Basic: 5206
HRA: 2082
Conveyance Allowance: 1600
Other Allowances: 4127
Gross: 13015
PF Employer: 1562 (On gross)
ESI Employer: 423
PT: 150
CTC: 15000
Take-home salary is Rs 10878.
Can anyone explain to me in detail the above structure?
Thanks & Regards
From India, Banjara Hills
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1In my company, they are calculating PF on the gross with a ceiling limit of Rs 15,000. They were asking me to do it in the format below, but I am not able to understand, and they don't have complete knowledge as they are blindly following their consultant. I tried to reach him, but he is not responding. The breakup is as follows:
Basic: 5206
HRA: 2082
Conveyance Allowance: 1600
Other Allowances: 4127
Gross: 13015
PF Employer: 1562 (On gross)
ESI Employer: 423
PT: 150
CTC: 15000
Take-home salary is Rs 10878.
Can anyone explain to me in detail the above structure?
Thanks & Regards
From India, Banjara Hills
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To the best of my understanding, the Basic is 40% of your Gross Amount. 40% of Basic is your HRA. Conveyance allowance is Rs. 1600/-, which is as per the Income Tax Exemption Limit, and the balance is taken as Other Allowances.
The PF contribution of the employer is wrongly calculated as 12% on Gross Salary; on the contrary, it should be 12% on Gross Salary less HRA. Kindly check the PF Amendment of April 2019.
Even the ESI Contribution of the employer is wrongly calculated. It's 3.25% on gross salary. Kindly check the recent amendment notice of ESIC w.e.f. July 01, 2019.
From India, Ahmadabad
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The PF contribution of the employer is wrongly calculated as 12% on Gross Salary; on the contrary, it should be 12% on Gross Salary less HRA. Kindly check the PF Amendment of April 2019.
Even the ESI Contribution of the employer is wrongly calculated. It's 3.25% on gross salary. Kindly check the recent amendment notice of ESIC w.e.f. July 01, 2019.
From India, Ahmadabad
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There is no need to complicate the salary structure at the 15,000/- CTC level, which is not taxable. Considering the minimum wage, recent verdict of the Supreme Court, etc., it may be a simple pay structure as follows:
Basic - 11,850.00 HRA - 1,185.00 (10% of Basic)
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Monthly gross - 13,035.00 Employer PF - 1,541.00 (13% including Admin charge, etc.) Employer ESI - 424.00 (3.25% from 01.07.2019)
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CTC - 15,000.00
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PT (Professional Tax) is not part of CTC as it is paid by the employee. It is possible to maintain 10% HRA of Basic up to 15,000.00. In the minimum wages definition, HRA is also included. Moreover, in some states of India (WB, Maharashtra, etc.), as per state act, 5% minimum HRA is required to pay.
Above 15,000.00 Basic, the HRA can be tapered off (Higher the Basic, higher % of HRA) and also consider ITAX effective pockets at a higher salary level.
Thanks & Regards, S K Bandyopadhyay (WB, Howrah)
From India, New Delhi
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Basic - 11,850.00 HRA - 1,185.00 (10% of Basic)
---------------------------------------
Monthly gross - 13,035.00 Employer PF - 1,541.00 (13% including Admin charge, etc.) Employer ESI - 424.00 (3.25% from 01.07.2019)
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CTC - 15,000.00
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PT (Professional Tax) is not part of CTC as it is paid by the employee. It is possible to maintain 10% HRA of Basic up to 15,000.00. In the minimum wages definition, HRA is also included. Moreover, in some states of India (WB, Maharashtra, etc.), as per state act, 5% minimum HRA is required to pay.
Above 15,000.00 Basic, the HRA can be tapered off (Higher the Basic, higher % of HRA) and also consider ITAX effective pockets at a higher salary level.
Thanks & Regards, S K Bandyopadhyay (WB, Howrah)
From India, New Delhi
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Dear Friend,
Greetings!!
First and foremost, I wish to know the level of expertise of the person whose salary has to be calculated - skilled, semi-skilled, or unskilled. After that, the basic salary will be decided.
Subsequently, I need to understand how your company calculates the employer's PF in trend, so that I can provide my inputs.
Rgds
From India, Delhi
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Greetings!!
First and foremost, I wish to know the level of expertise of the person whose salary has to be calculated - skilled, semi-skilled, or unskilled. After that, the basic salary will be decided.
Subsequently, I need to understand how your company calculates the employer's PF in trend, so that I can provide my inputs.
Rgds
From India, Delhi
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Salary Sheet & PF PT Calculation & Challan Nov 2010.xls