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Particulars Amount
Basic 27,750.00
HRA 11,100.00
MEDICAL REIMBURSEMENT 1,250.00
CONVEYANCE ALLOWANCE 1,600.00
LTA 2,312.50
FURNISHING ALLOWANCE 22,326.00

Total Gross Salary 66,338.50
Other than the above annual bonus @20% of Basic, PF at 1800 considered.
As HRD is in the Excluded list (Medical+Conveyance+LTA+Furnishing allowance put together is 27488.5)
Plz advise is it correct working.

From India , Mumbai
Dear Sir,
Query Regarding Salary Structure under New Wage code.
Basic +DA=29550
HRA = 11820
Other Allowance =29504
Monthly Gross =70874 P. M
In above case excluding HRA, Basic And Other allowance are at 50:50 ration of monthly gross.
My query is is it accordance with New Wage code.
Plz suggest.
Thanks & Regards

From India , Mumbai
nanu1953
334

As per new wage code, wage ( basic & DA) should be 50% of all the remuneration. Therefore, remuneration paid on monthly as well as yearly basis excluding Gratuity, ESIC and any other insurance premium & any retrenchment compensation will be part of the all remuneration and 50% of that will be Basic & DA.
I have made many calculations in past which you will find to my earlier posts. Please follow the same and correct your present calculation accordingly.
Thanks & Regards,
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions

From India, New Delhi
shobhit-kumar-mittal
50

The allowances other than Basic+DA are Rs. 11820 + 29504 = Rs 41324
One half of Rs. 70874 would be Rs. 35437. Therefore the allowance exceed the one half by Rs. 5887 (41324 - 35437)
Since Basic+DA is only Rs. 29550, so this excess amount of Rs. 5887 would be treated as basic and, thus, the basic wage would be Rs. 29550 + 5887 = 35437
- S.K. Mittal
9319956443

Dear Sir,
This is for discussion point :
As the wage code states as below
(y) "wages" means all remuneration whether by way of salaries, allowances or
otherwise, expressed in terms of money or capable of being so expressed which would,
if the terms of employment, express or implied, were fulfilled, be payable to a person
employed in respect of his employment or of work done in such employment, and
includes,—
(i) basic pay;
(ii) dearness allowance; and
(iii) retaining allowance, if any,
but does not include––
(f) house rent allowance;
My query is
1) what would happen in above case ? Where HRA is excluded list from the wage components.
2) If employer paid HRA separately which is not part of monthly gross salary, what is the statutory obligation?
Plz suggest.
Thanks & Regards

From India , Mumbai
nanu1953
334

To my opinion the definition of "Wage "in different Labour codes are quite scientific, no ambiguity but slightly twisting in the calculation method. That is the reason there is confusion across the country amongst HR faternity except few.

If we read the definition it states Wages means all remuneration by the way of salaries, allowances or otherwise and includes Basic, DA & Retaining allowance but does not include the list of items from (a) to ( k).

Now in proviso the twist starts where it has been mentioned that components between (a) to (i) if more than 50% of all the remuneration calculated under the clause, will add back to Wage. It has also been mentioned that the amounts which will be considered should be payable to any person. That is why law makers has not been considered ESIC which is not payable to any person but PF contribution of employer has been considered as it is payable to any person's account. Similarly, premium to any insurance not payable to any employee should not be considered for calculation.

Please correct all the calculations as mentioned above accordingly as those are not correct as per definition of Wage.

Therefore, as I mentioned earlier, it will be essential while re-work of the remuneration structure to have proper knowledge, understanding - otherwise it will not be correct.

Thanks & Regards,

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions

From India, New Delhi
Dear Sir,
For working CTC of 900006 P. A. here is the working.
1) Basic : 29300. pm.
2) HRA : 11720 pm
3) Medical Reimbursement : 1250 p.m.
4) Conveyance Allowance : 1600 p.m.
5) LTA : 2441 p.m.
Monthly Gross : 53856 p.m.
6) Employer PF Contribution : 1800 p.m.
7) Annual Bonus @ 8.33 : 2440.69
Basic 29300 , and all allowance 28796.69
Net Salary 53856-1800 (PF)-200(PT)= 51856/-
Regards

From India , Mumbai
nanu1953
334

It appears that you are not able to understand the twist of the calculation. If CTC excluding gratuity, insurance premium is 900006/- P.A., then Basic will be 450003/- P.A. i.e 37,500/- P.M. Other allowances including Employer's portion of PF, Statutory Bonus will be also 450003/- P.A i.e 37,500/- P.M. Accordingly you will be required to distribute the other allowances and if necessary you may be required to drop some items. This is re-structuring of existing Remuneration Structure.

Moreover, you have mentioned that Annual Bonus (Statutory) 8.33% -- 2440.69 which is 8.33% of your considered Basic. As per PB Act Bonus calculation should be on the basis of minimum wages in your case which is obviously not the your considered basic. If we calculate it on the basis of PB Act i.e minimum wages your calculated amount will be more than 8.33%.

If you find difficulties to restructure the existing remuneration system, take help of experts available in the market. You may contact me over phone on or after 24th March,2021.

Thanks and regards,

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions

From India, New Delhi
Dear Sir,
Annual CTC 900006 including gratuity.
Part A
1)Basic 29300 P.M. ( Min Wages In Maharashtra Zone I Construction Industry 16313)
2)HRA 11720 P.M.
3)Medical Reimbursement 1250. P.M.
4)Conveyance 1600 P.M.
5)LTA 2441 P.M.
6)Furnishing allowance 7545 P.M.

Part B
7) Employer PF contribution 1800 P. M
8) Bonus @ 8.33% 2440.69 P.M. ( Current basic is more than Minimum wages)
Summery
Basic 29300 ,
All allowance 28796.69( Including ER PF & Bonus)
Gratuity 16903.85
Monthly CTC : 75000.54
Annual CTC Including Bonus & Gratuity :900006.43
Net Salary:
Gross : 53856
-1800 (PF)-200(PT)= 51856/-

From India , Mumbai
nanu1953
334

It appears from your submission that Monthly CTC including Annual Bonus and Gratuity is 75000/- P.M. As gratuity is out of scope of calculation of Total remuneration as per proviso -1 of Wages definition under Wage Code, therefore, the total remuneration will be 75000 - gratuity monthly amount (in your case maxm may be 1500/- per month ) = 73500/- per month. 50% of the same will be 36,750/- per month will be basic. This is not as per your or my wish. This is as per Wage definition.

Bonus Act is one of the complicated Act under labour laws. How to calculate % of bonus from gross profit, available surplus, alocable surplus, set on & set off is not very easy. There is a condition under PB Act is Customary Bonus which are paid not as per PB Act. In your case it is Customary Bonus, not Bonus as per PB Act as your calculation is based on current basic which is more than minimum wages and not complying the calculation conditions under PB Act. You may pay more than PB Act calculation. As per new wage code if you pay customary bonus , you will also be required to calculate as per PB Act as mentioned above and if as per PB Act calculation it is less then it will be required to pay the difference. In your case 8.33% is more than PB Act calculation. But I am not sure whether your organization is calculating bonus % as per PB Act or not whic is a problem for good number of Indian Organizations - they just pay 8.33%.

Thanks and regards,

S K Bandyopadhyay ( WB, Howrah)

CEO-USD HR Solutions

From India, New Delhi
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